Thursday's Deal Analysis

1H Chart for GBP/USD

The GBP/USD pair continued its upward movement on Thursday. There were no macroeconomic or fundamental drivers behind this rise in the British currency. However, we previously warned of a purely technical correction, reflecting traders closing short positions accumulated over two months. Thus far, everything appears to be proceeding as planned. This correction may persist for another week or two, featuring periods of range-bound trading. Most instruments, generally speaking, spend more time in flat conditions than in trends. Today, there will be no news from either the UK or the US. The pound may continue its gradual ascent, but it could also remain range-bound throughout the day.

5M Chart for GBP/USD

On the 5-minute timeframe, only one trading signal was formed on Thursday. Late in the day, the pair broke through the 1.2680–1.2685 level; however, the signal technically formed overnight. If novice traders managed to act on it, that's great. Nevertheless, today's movements might remain relatively weak. In any case, traders can now set a Stop Loss at breakeven and monitor the market for further developments.

How to Trade on Friday

On the hourly timeframe, GBP/USD continues to lean toward a downtrend. In the medium term, we anticipate further declines in the pound, as this appears to be the most logical scenario. However, the pound has started a correction, which could take some time. It is important to remember that the current rise in the British currency is based purely on technical factors.

On Friday, novice traders can anticipate further growth in the British pound. The breach of the 1.2680–1.2685 level supports this expectation. However, we do not foresee a significant rally today.

Key Levels for Friday

On the 5-minute timeframe, trade based on the following levels:1.2387, 1.2445, 1.2502–1.2508, 1.2547, 1.2633, 1.2680–1.2685, 1.2754, 1.2791–1.2798, 1.2848–1.2860, 1.2913, 1.2980–1.2993.There are no major events or reports scheduled in either the US or the UK for Friday. Therefore, the pound sterling may continue its rise on technical grounds. Nevertheless, volatility is likely to remain subdued today.

Key Trading System Rules

1. Signal Strength: The shorter the time required to form a signal (bounce or breakthrough), the stronger the signal.
2. False Signals: If two or more false signals occur at a level, ignore all subsequent signals from that level.
3. Flat Markets: In flat conditions, pairs may generate numerous false signals or none at all. If flat trading becomes apparent, it is better to stop trading.
4. Trading Times: Open trades during the European session and close them manually by the middle of the US session.
5. MACD Signals: On the hourly timeframe, only trade MACD signals with strong volatility and a confirmed trend supported by trend lines or channels.
6. Close Levels: Treat levels spaced 5 to 20 points apart as support or resistance zones.
7. Stop Loss Adjustment: Move the Stop Loss to breakeven after a 20-point move in the correct direction.

What's on the chart:

• Support and Resistance Levels: These levels are targets for opening buy or sell trades. Take Profit levels can also be placed here.
• Red Lines: Channels or trend lines indicating the current trend and preferred trading direction.
• MACD (14,22,3): A histogram and signal line used as auxiliary signal sources.
• News and Reports: Major events (found in the economic calendar) can significantly influence currency pair movements. During such events, trade cautiously or exit the market to avoid abrupt reversals.

Advice for Beginners

Traders should bear in mind that not every trade will be profitable. Developing a clear strategy and practicing sound money management are essential for long-term success in trading.