Analysis of Wednesday's Trades

1H Chart of GBP/USD

The GBP/USD pair also continued its upward movement on Wednesday. As expected, this happened without the need for any news or reports. As we've said many times, the broad fundamental backdrop is sufficient for the U.S. dollar to keep depreciating. The market regularly takes a stance on Donald Trump's war against Powell and the global trade war. If the outlook for the U.S. economy under these conditions were optimistic and positive, the dollar wouldn't have been plunging for six months in a row.

Therefore, we do not view the growth of the U.S. stock market or Bitcoin as signs of economic strength or a bright future for America. We believe the dollar itself best reflects the real state of the U.S. economy and what foreign investors expect from it. From a technical standpoint, the situation is similar to that of the euro: the price has consolidated above the descending trendline, and a legitimate upward trend is now forming.

5M Chart of GBP/USD

On the 5-minute timeframe, the pair made two rebounds from the 1.3518–1.3532 area on Wednesday, then climbed to the next target zone at 1.3574–1.3590. Two subsequent bounces from that area also allowed novice traders to open short positions. The signals repeated each other in both cases. As a result, it was possible to make a small profit on Wednesday, although overall volatility remained very low throughout the day.

Trading Strategy for Thursday:

On the hourly timeframe, GBP/USD shows signs of forming a new local upward trend. The price has consolidated above the descending trendline, indicating a further rise is expected in the coming weeks. The fundamental background continues to weigh against the U.S. dollar, and the market hasn't yet priced in many negative factors for the greenback.

On Thursday, the GBP/USD pair may continue to rise regardless of the local macroeconomic backdrop. We believe that a breakout above the 1.3574–1.3590 area will pave the way for the pound to reach the 1.3643–1.3652 zone.

On the 5-minute chart, the following levels are relevant for trading: 1.3203–1.3211, 1.3259, 1.3329–1.3331, 1.3413–1.3421, 1.3466, 1.3518–1.3525, 1.3574–1.3590, 1.3643–1.3652, 1.3682, 1.3763, 1.3814–1.3832.

On Thursday, business activity reports will be released in both the UK and the U.S. The UK data will be more significant in this case, as the U.S. has its own more impactful indices, such as the ISM reports. The market usually draws conclusions about U.S. business activity based on those.

Core Trading System Rules:

1. Signal Strength: The shorter the time it takes for a signal to form (a rebound or breakout), the stronger the signal.
2. False Signals: If two or more trades near a level result in false signals, subsequent signals from that level should be ignored.
3. Flat Markets: In flat conditions, pairs may generate many false signals or none at all. It's better to stop trading at the first signs of a flat market.
4. Trading Hours: Open trades between the start of the European session and the middle of the US session, then manually close all trades.
5. MACD Signals: On the hourly timeframe, trade MACD signals only during periods of good volatility and a clear trend confirmed by trendlines or trend channels.
6. Close Levels: If two levels are too close (5–20 pips apart), treat them as a support or resistance zone.
7. Stop Loss: Set a Stop Loss to breakeven after the price moves 20 pips in the desired direction.

Key Chart Elements:

Support and Resistance Levels: These are target levels for opening or closing positions and can also serve as points for placing Take Profit orders.

Red Lines: Channels or trendlines indicating the current trend and the preferred direction for trading.

MACD Indicator (14,22,3): A histogram and signal line used as a supplementary source of trading signals.

Important Events and Reports: Found in the economic calendar, these can heavily influence price movements. Exercise caution or exit the market during their release to avoid sharp reversals.

Forex trading beginners should remember that not every trade will be profitable. Developing a clear strategy and practicing proper money management are essential for long-term trading success.