Analysis of Thursday's Trades

1H Chart of GBP/USD

The GBP/USD pair declined on Thursday, despite having fewer reasons for this movement. Trump's tariffs against the EU do not directly affect the UK, which left the bloc years ago. However, reports on U.S. GDP and durable goods orders favored the dollar. Notably, durable goods orders rose by 3.1% in January, exceeding the forecast of 2%. The third estimate of GDP growth remained unchanged from previous assessments, which indicates strong performance for the U.S. dollar.

Later in the day, Trump announced that tariffs were also being planned for UK imports, putting the pound in the same situation as the euro. Additionally, the pound had been overbought in recent weeks, rising consistently without significant corrections and often without justified reasons. Therefore, the pound is now expected to decline similarly to the euro.

5M Chart of GBP/USD

On the 5-minute chart, multiple trading signals were generated on Thursday. At the start of the U.S. trading session, the pair rebounded three times from the 1.2680-1.2685 range before falling to 1.2613, where it consolidated below this level. This provided novice traders with an opportunity to earn about 50 pips on short positions.

Trading Strategy for Friday:

In the hourly timeframe, GBP/USD may start a short-term downtrend, but recent movements have been corrections on the daily timeframe. We still expect the pound to decline toward the 1.1800 target in the medium term, as this seems logical. Therefore, we are now waiting for the daily timeframe's upward correction to end, which may have already happened this week.

On Friday, GBP/USD could begin another downward move, as the pound has risen significantly recently. However, the ascending trendline has not yet been broken, and a decline toward this trendline is highly likely.

For the 5-minute chart, the relevant trading levels are 1.2164-1.2170, 1.2241-1.2270, 1.2301, 1.2372-1.2387, 1.2445, 1.2502-1.2508, 1.2547, 1.2613, 1.2680-1.2685, 1.2723, and 1.2791-1.2798. On Friday, no significant events or reports are scheduled for the UK. In the U.S., the PCE index and consumer income and spending reports will be released, though they are not highly significant, and the market reaction may be weak.

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.