Friday's Trade Review:

1H Chart of the GBP/USD Pair

The GBP/USD pair also showed signs of recovery on Friday, although in the first half of the session, it once again attempted to resume its decline and failed to break through the descending trendline. Therefore, the downtrend remains in effect for now, even though it is entirely illogical.

The rise of the dollar should have come to an end a week ago. Even then, there were more than enough reasons for the U.S. currency to resume falling. Over the past week, those reasons have only multiplied, especially after Donald Trump initiated a new round of trade war escalation with China—a key reason for the dollar's collapse earlier this year.

Even central bank monetary policy had taken a back seat to geopolitical risks. Meanwhile, the U.S. is in the midst of a government shutdown, and the Federal Reserve is expected to continue cutting rates, unlike the European Central Bank or the Bank of England.

As such, there is currently no justification for expecting the dollar to strengthen further.

5M Chart of the GBP/USD Pair

In the 5-minute time frame, a strong buy signal was formed during the European session on Friday. The price bounced with precision from the 1.3259 level and then gained 80–90 pips, consolidating above the 1.3329–1.3331 zone.

By Friday evening, novice traders had the opportunity to close their trades with a solid profit. Today, a bounce from the 1.3329–1.3331 zone is another reason to look for long entries.

How to Trade on Monday:

On the hourly timeframe, GBP/USD continues to form a downward trend. As mentioned previously, there are no strong reasons to expect prolonged dollar strength. In the medium term, we continue to expect an upward movement. That said, the market is currently in a very strange state. The pound is falling, but without any clear justification. While technical strategies on lower timeframes remain applicable, current price behavior appears illogical across all timeframes.

On Monday, the GBP/USD pair may continue its upward movement, as the 1.3329–1.3331 zone was breached on Friday. A bounce from this area opens the door for long positions with a target at 1.3413–1.3421. Failure to hold above this zone would make short positions relevant, with a target at 1.3259.

On the 5-minute timeframe, the following levels can be used for trading: 1.3102–1.3107, 1.3203–1.3211, 1.3259, 1.3329–1.3331, 1.3413–1.3421, 1.3466–1.3475, 1.3529–1.3543, 1.3574–1.3590, 1.3643–1.3652, 1.3682, 1.3763. No critical or noteworthy events/reports are scheduled in the U.K. or U.S. on Monday, so today's volatility may remain low.

Basic Rules of the Trading System:

1. Signal strength is determined by how quickly it forms (bounce or breakout). The less time required, the stronger the signal.
2. If two or more false signals appear near the same level, subsequent signals from that level should be ignored.
3. In a flat market, any pair can generate many false signals—or none at all. At the first signs of flat, consider suspending trading.
4. Trades should be opened during the European session and held until mid-U.S. session. After that, all positions should be closed manually.
5. On the hourly timeframe, MACD signals should only be used when good volatility and a trend are confirmed by a trendline or trend channel.
6. If two levels are too close together (5–20 pips apart), treat them as a single support or resistance zone.
7. After the price moves 20 pips in the right direction, move the Stop Loss to breakeven.

What's on the Charts:

• Support and resistance levels – targets for opening long or short trades. Take Profit points can be set near these levels.
• Red lines – trendlines or channels indicating the current trend and directional bias.
• MACD Indicator (14,22,3) – histogram and signal line used as a supplementary signal source.

Important speeches and economic releases (always listed in the news calendar) can significantly impact currency movement. Traders should be especially cautious or exit positions before such events to avoid sudden price reversals.

Beginner traders in the forex market must remember: not every trade will be profitable. Developing a clear strategy and applying sound money management principles are keys to long-term success in trading.