Analysis of Tuesday's Trades

1H Chart of GBP/USD

Throughout Tuesday, the GBP/USD pair continued its upward movement. As we can see, the British currency doesn't need any particular reason to keep rising. We've said several times that there's little logic in market movements right now — and that's something to keep in mind. Yesterday, Donald Trump refrained from introducing new tariffs. A few macroeconomic reports were published in the UK, but they couldn't reasonably be interpreted in favor of the pound. The unemployment rate remained unchanged, wages rose by 5.6%, and jobless claims were only slightly below forecasts.

Formally, the reports weren't worse than expected by traders, but in reality, the deviations were minor, and the key unemployment report showed no change at all. Yet the pound gained another 40 pips on that data — adding another 40 overnight.

5M Chart of GBP/USD

On Tuesday, several trading signals formed in the 5-minute time frame, but they all left much to be desired. The 1.3325 level was ignored throughout the day. The pair can't show any correction; it rises or moves sideways. The price action is entirely non-technical and illogical.

Trading Strategy for Wednesday:

In the hourly time frame, GBP/USD should have already started a downward trend, but Trump continues to do everything to bring down the dollar. Since the official start of the global trade war, we've stopped making long-term forecasts for currency pairs. The market remains under Trump's control and is subject to his decisions. Trump announces new tariffs — the dollar drops. Trump raises tariffs — the dollar drops. Even a pause in escalation leads to a flat market, or the dollar still drops.

On Wednesday, GBP/USD may remain highly emotional. Predicting where the pound and dollar will move today is nearly impossible. The dollar continues to decline, even though no new trade war updates have emerged. The uptrend has continued overnight without a break.

On the 5-minute TF it is now possible to trade at 1.2547, 1.2613, 1.2680-1.2685, 1.2723, 1.2791-1.2798, 1.2848-1.2860, 1.2913, 1.2980-1.2993, 1.3043, 1.3102-1.3107, 1.3145-1.3167, 1.3225, 1.3272, 1.3365. Inflation data for March is scheduled to be released in the UK on Wednesday, and traders may again interpret the report in favor of the pound. Even if the data is weak, the dollar may only strengthen briefly before resuming its decline.

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.