Analysis of Wednesday's Trades

1H Chart of GBP/USD

On Wednesday, the GBP/USD pair also posted another decline for the same reasons as EUR/USD — a strong U.S. GDP report combined with hawkish rhetoric from Jerome Powell. In principle, we had already warned that the market was once again pricing in the most dovish scenario possible. In reality, inflation in the U.S. is rising, which does not imply a near-term easing of monetary policy. However, the market continued to believe until the last moment that the Federal Reserve would resume the rate-cutting cycle at least in September. It now appears those hopes are once again unlikely to materialize. Powell once again demonstrated that Donald Trump's pressure has no effect on him and that the Fed still retains its independence.

5M Chart of GBP/USD

In the 5-minute timeframe on Wednesday, two trading signals were formed. At the beginning of the U.S. session, the price broke through the 1.3329–1.3331 area, and by the end of the day (not without Powell's help), it managed to reach and break through the 1.3259 level. Thus, novice traders could have opened at least one short position, which in any case would have been profitable.

Trading Strategy for Thursday:

In the hourly chart, the GBP/USD pair shows that the downward technical correction continues. The British pound has been falling for five consecutive days, although more accurately, it would be fair to say that the U.S. dollar has been rising for five straight days. Last week, the decline was purely technical in nature, but this week, almost every news release favors the U.S. currency.

On Thursday, the GBP/USD pair may rebound slightly upward from the 1.3259 level. A further decline in the pound is quite possible, but the market has already priced in Ursula von der Leyen's failed trade deal, the GDP report, and the FOMC meeting.

On the 5-minute chart, trading on Thursday can be based on the following levels: 1.3102–1.3107, 1.3203–1.3211, 1.3259, 1.3329–1.3331, 1.3413–1.3421, 1.3466, 1.3518–1.3532, 1.3574–1.3590, 1.3643–1.3652, 1.3682, 1.3763.

On Thursday, there are once again no important reports or events scheduled in the UK, and the U.S. will release a few secondary reports, which are unlikely to have a significant impact on the U.S. dollar.

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.