Friday Trade Review: 1H Chart for GBP/USD

On Friday, the GBP/USD pair showed total flat movement and low volatility. As with the EUR/USD pair, there was no news that day, and no macroeconomic publications were released either in the UK or the US. The United States observed Independence Day, so all stock and currency markets were closed. As we had warned, Friday turned out to be a semi-holiday.

5M Chart for GBP/USD

On the 5-minute timeframe, one trading signal was formed on Friday, and it could even be executed. During the European trading session (when there was still some hope for movement), the price bounced twice from the 1.3682 level and then dropped to the 1.3643–1.3652 level, where it stayed for the rest of the day. Opening short positions was probably not meaningful, knowing volatility would be near zero, but this signal still allowed for a profit of about 20–25 points.

How to Trade on Monday:

On the hourly timeframe, the GBP/USD pair fell sharply, but this drop opens no new prospects for the dollar. Essentially, the dollar only strengthened for one day and ignored a large number of positive reports from the US. Therefore, the same conclusion can be drawn as before: traders remain uninterested in buying the dollar under any circumstances.

On Monday, the GBP/USD pair may again trade with low volatility, as no important events are scheduled for the day. A new upward trendline has formed on the hourly timeframe, once again supporting the growth of the British currency.

On the 5-minute timeframe, trading is currently possible based on the levels: 1.3203–1.3211, 1.3259, 1.3329–1.3331, 1.3413–1.3421, 1.3518–1.3535, 1.3580–1.3592, 1.3643–1.3652, 1.3682, 1.3763, 1.3814–1.3832. On Monday, no publications or speeches are scheduled in the UK or the US, so volatility will likely remain low throughout the day.

Main Trading System Rules:

1. The strength of a signal is determined by how long it takes to form (bounce or breakout of a level). The less time required, the stronger the signal.
2. If two or more false trades were opened near a certain level, all subsequent signals from that level should be ignored.
3. In a flat market, any pair may produce many false signals or none at all. In any case, it is best to stop trading at the first signs of a flat.
4. Trades should be opened during the time window from the beginning of the European session until the middle of the American session. All trades should be closed manually afterward.
5. On the hourly timeframe, MACD signals should ideally be used only when there is good volatility and a trend confirmed by a trendline or trend channel.
6. If two levels are too close to each other (5 to 20 points apart), they should be treated as a support or resistance area.
7. Once the price has moved 20 points in the correct direction, a Stop Loss should be set at breakeven.

What's on the chart:

• Support and resistance levels – price levels used as targets when opening buy or sell positions. Take Profit levels can be placed near them.
• Red lines – channels or trendlines indicating the current trend and showing which direction is preferred for trading.
• MACD indicator (14, 22, 3) – histogram and signal line – an auxiliary indicator that can also be used for signal confirmation.
• Important speeches and reports (always listed in the news calendar) can significantly influence the movement of a currency pair. Therefore, during their release, it's recommended to trade with extreme caution or exit the market to avoid sharp reversals.

Beginners in Forex trading should remember that not every trade will be profitable. A clear strategy and money management are key to long-term success in trading.