Analysis of Friday's Trades

1H Chart of GBP/USD

On Friday, the GBP/USD pair showed movements almost identical to those of the EUR/USD pair. This is because the key factors were the same. Israel's overnight attack on Iran triggered a sharp strengthening of the dollar, which quickly came to an end as traders remembered that geopolitics in the Middle East is not currently the market's top priority. The only report—the University of Michigan Consumer Sentiment Index—was much stronger than expected, yet it did not support the dollar.

Donald Trump is once again stirring global unrest, this time in the Middle East. Although the U.S. officially denies involvement in the strike on Iran, Trump's subsequent statements suggest that he was at the very least aware of it. Trump is demanding that Iran abandon uranium enrichment and the production of nuclear missiles. Tehran refuses to comply. What's next? Will a full-scale war break out? But wasn't Trump the one who wanted to end all wars on the planet? Or has that changed?

5M Chart of GBP/USD

Three trading signals were formed on Friday in the 5-minute timeframe. The price bounced twice from the 1.3518–1.3535 area and, on the second attempt, managed to reach the nearest target—1.3580–1.3592. The bounce from this area (a sell signal) was likely not worth acting on, as it occurred very late in the day.

Trading Strategy for Monday:

In the hourly timeframe, the GBP/USD pair focuses solely on Trump and remains skeptical of his policies. As before, the market seizes every opportunity to sell the dollar rather than buy it. This will continue until the market sees real signs of an end to the trade war and until Trump stops making decisions beyond his authority. The escalation of the military conflict between Israel and Iran did help the U.S. currency, but we do not believe this factor outweighs the others that have been pressuring the dollar for the past four months.

The GBP/USD pair may remain volatile on Monday. Everything will depend on Trump's news regarding the trade war and the conflict between Iran and Israel.

In the 5-minute timeframe, consider the following levels: 1.3043, 1.3102–1.3107, 1.3203–1.3211, 1.3259, 1.3329–1.3331, 1.3421–1.3443, 1.3518, 1.3580–1.3592, 1.3652–1.3660, 1.3695, 1.3740. No macroeconomic reports are scheduled for Monday in the U.S. or the U.K., but news will undoubtedly emerge over the weekend and Monday. And on Monday night, we may witness new price "spikes."

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.