Thursday Trade Analysis
GBP/USD 1H Chart
The GBP/USD pair also traded with minimal volatility and within a downward channel throughout Thursday. However, it cannot be said that the British pound is currently in a downtrend, even on the hourly timeframe. There is no downward trend line, and the pound has been falling for only three days. Moreover, it is very difficult to say that this decline is justified.
This week, there were no significant events in the United Kingdom, while in the United States the JOLTs and ADP labor market reports and the ISM business activity indices for the services and manufacturing sectors were released. All of these reports can be considered important or relatively important—that is, reports that should have triggered at least a moderate market reaction. In fact, out of the four reports, three turned out to be negative for the dollar, coming in below forecasts. However, the dollar has been rising for three consecutive days, ignoring the macroeconomic background.
Today, another set of U.S. labor market reports will be released, but with such low volatility we are not confident that there will be any interesting price movements today.
GBP/USD 5M Chart
On the 5-minute timeframe, several trading signals were formed on Thursday. However, this was not due to high volatility or trending movements, but because the price encountered the 1.3437–1.3446 level and traded sideways for most of the day. All three trading signals were sell signals, so beginner traders could open short positions yesterday. Since the sell signals have not been canceled, short positions can be held on Friday.
How to Trade on Friday
On the hourly timeframe, the GBP/USD pair has consolidated below the trend line; however, we see that there is currently no downtrend. There are no global reasons for medium-term dollar growth, so we expect movement only to the upside. Overall, we also expect a resumption of the global 2025 uptrend, which could take the pair to the 1.4000 level within the next couple of months.
On Friday, beginner traders may remain in short positions with a target in the 1.3319–1.3331 level, as three sell signals were formed yesterday and a few more similar signals may be formed today. A consolidation above the 1.3437–1.3446 level will make long positions relevant, with a target of 1.3529.
On the 5-minute timeframe, the following levels can currently be traded: 1.3043, 1.3096–1.3107, 1.3203–1.3212, 1.3259–1.3267, 1.3319–1.3331, 1.3437–1.3446, 1.3529–1.3543, 1.3574–1.3590, 1.3643–1.3652, 1.3682, 1.3763.
On Friday, no noteworthy events are scheduled in the United Kingdom, while in the United States the most important reports—Non-Farm Payrolls and the unemployment rate—will be released. They are very important, but they do not guarantee a strong price reaction.
Basic Trading System Rules
- Signal strength is determined by the time required to form the signal (a rebound from or a breakout of a level). The less time required, the stronger the signal.
- If two or more trades were opened near a certain level based on false signals, all subsequent signals from that level should be ignored.
- In a flat market, any pair may form many false signals or none at all. In any case, at the first signs of a flat market, it is better to stop trading.
- Trades should be opened during the time period from the start of the European session until the middle of the U.S. session, after which all trades should be closed manually.
- On the hourly timeframe, it is advisable to trade MACD indicator signals only when there is good volatility and a trend confirmed by a trend line or trend channel.
- If two levels are located too close to each other (from 5 to 20 points), they should be treated as a support or resistance zone.
- After the price moves 20 points in the correct direction, the Stop Loss should be moved to breakeven.
What Is Shown on the Chart
- Support and resistance price levels – levels that serve as targets when opening buy or sell trades. Take Profit levels can be placed near them.
- Red lines – trend lines or channels that reflect the current trend and indicate the preferred trading direction.
- MACD indicator (14, 22, 3) – the histogram and signal line serve as auxiliary indicators and can also be used as signal sources.
Important speeches and reports (always listed in the economic calendar) can have a strong impact on a currency pair's movement. Therefore, during their release, it is recommended to trade with maximum caution or exit the market to avoid sharp price reversals against the preceding move.
Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and proper money management are the keys to long-term success in trading.
