Trade Analysis for Friday:
1-Hour Chart of the GBP/USD Pair
The GBP/USD pair moved similarly to the EUR/USD pair on Friday—there were virtually no movements, and volatility was minimal. This is not surprising, as the macroeconomic backdrop last week was only present on Tuesday, trading ended early on Wednesday, and Thursday was a holiday. We can expect a similar picture this week. The macroeconomic and fundamental backdrop is absent; Wednesday is a shortened trading day; Thursday is a holiday; and on Friday, the market will likely not trade. Therefore, some movements may be observed on Monday and Tuesday, but then it will be back to holiday mode. The upward trend for the British currency persists, so even in the short term, novice traders can expect growth, let alone in the long term. However, we anticipate a resumption of trend movements starting January 5, when macroeconomic information begins to flow in, and the market fully wraps up its Christmas and New Year festivities.
5-Minute Chart of the GBP/USD Pair
On the 5-minute timeframe, one trading signal for a sell was formed on Friday with a slight margin of error. The price bounced off the 1.3529 level during the U.S. trading session, then moved down by about 30 pips, which novice traders could have captured. Such a profit is a great result for the holiday season.
How to Trade on Monday:
On the hourly timeframe, the GBP/USD pair has completed its flat and has once again started moving upwards. We fully support this scenario, as discussed previously. There are no global grounds for medium-term dollar growth; therefore, we expect movement only to the upside. Overall, we anticipate the resumption of the global upward trend in 2025, which could push the pair to the 1.4000 mark in the next couple of months.
On Monday, novice traders can consider new long positions if the price breaks through the area of 1.3529-1.3543, targeting 1.3574-1.3590. Short positions will become relevant upon a new bounce from the region of 1.3529-1.3543, targeting 1.3437-1.3446.
On the 5-minute timeframe, trading opportunities can currently be identified at the following levels: 1.2913, 1.2980-1.2993, 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. On Monday, no significant events are scheduled in the UK or the US, and market volatility may remain weak. The market is currently "thin," making it easier for market makers to move prices than in regular times, but this does not automatically mean they want to do so.
Key Rules of the Trading System:
- The strength of a signal is assessed by the time it takes to form the signal (bounce or breakout). The less time it takes, the stronger the signal.
- If two or more trades were opened near any level based on false signals, all subsequent signals from that level should be ignored.
- In a flat, any pair can create numerous false signals or none at all. In any case, it's better to stop trading at the first signs of a flat.
- Trades are opened during the period between the start of the European session and the middle of the American session, after which all trades must be closed manually.
- On the hourly timeframe, when trading based on signals from the MACD indicator, it is preferable to trade only when good volatility is present, and a trend is confirmed by a trend line or channel.
- If two levels are positioned too closely to each other (5 to 20 points), they should be viewed as a support or resistance area.
- After moving 20 pips in the right direction, set the Stop Loss to breakeven.
Chart Explanation:
- Support and Resistance Levels: Levels that serve as targets for opening buys or sells. Take Profit levels can be placed near them.
- Red Lines: Channels or trend lines that reflect the current trend and indicate the preferred direction for trading.
- MACD Indicator (14, 22, 3): A histogram and signal line, a supplementary indicator that can also be used as a source of signals.
Important Note: Significant speeches and reports (always included in the news calendar) can greatly influence the movement of the currency pair. Therefore, during their release, it is advisable to trade cautiously or exit the market to avoid sharp reversals against the preceding movement.
Remember: For beginners trading in the Forex market, it is important to understand that not every trade can be profitable. Developing a clear strategy and practicing money management are keys to long-term trading success.
