Monday Trade Review:

1H Chart of GBP/USD

The GBP/USD pair also traded in an ascending channel on Monday, despite the absence of significant or local reasons. By this, we mean that throughout the day, there were no important news releases or macroeconomic data from the UK or the US. However, the US data from last Friday are more than enough reason for the dollar to keep falling for a long time. Let's recall: the American currency dropped during the first 8 months of 2025, even while the Federal Reserve held its rate steady, and the Bank of England had already cut its rate three times. Now, due to high inflation, the British central bank is unlikely to ease monetary policy again before year-end, whereas the Fed could be easing at each of the three remaining meetings this year. Last Friday's US labor market and unemployment data have just made three rate cuts through the year-end even more likely. The British pound consolidated above the 1.3543 level last night, opening the way further north.

5M Chart of GBP/USD

There were no trading signals formed on the 5-minute chart on Monday. During the European session, the price entered the 1.3529–1.3543 area and remained there until the end of the day. The consolidation above this area only happened last night.

How to Trade on Tuesday:

On the hourly chart, the GBP/USD pair is showing signs of resuming its uptrend, while on higher timeframes the upward trend remains intact. Thus, the hourly movement we've seen in recent weeks was merely a pause in the larger uptrend. As we have said before, we see no grounds for medium-term dollar growth, and so we expect the consolidation (flat) to end and for the British pound to resume its upward movement.

On Tuesday, the GBP/USD pair may continue moving north, as the 1.3529–1.3543 area has been overcome. The nearest target is the 1.3574–1.3590 area. The only scenario in which the pound could fall today would be if the NonFarm Payrolls report comes out strongly.

On the 5-minute chart, you can now trade around the levels 1.3102–1.3107, 1.3203–1.3211, 1.3259, 1.3329–1.3331, 1.3413–1.3421, 1.3466–1.3475, 1.3529–1.3543, 1.3574–1.3590, 1.3643–1.3652, 1.3682, 1.3763. For Tuesday, there are no important releases scheduled in the UK, but in the US, the annual NonFarm Payrolls report will be published, which, for obvious reasons, is even more important than the one released last Friday.

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.