Monday Trade Review:

1-Hour Chart of GBP/USD

On Monday, GBP/USD also traded with minimal volatility and slowly declined throughout the session. In fact, this kind of movement is not surprising—and we'd even say it was expected. There were no macroeconomic or fundamental events at all on Monday. The pair had been rising for about three days as part of a new uptrend, so a minor downward correction was completely logical. On the daily timeframe, a flat range remains firmly in place, so strong volatility and clear trend-based movements are not to be expected right now.

It's also worth noting that the market has been ignoring many news events—especially those that are negative for the U.S. dollar—for about three weeks now. From our perspective, current market movements do not reflect the nature of recent news nor the broader fundamental picture in the U.S or globally.

5-Minute Chart of GBP/USD

On the 5-minute chart, several trading signals were generated throughout Monday. However, none were marked on the chart as volatility barely reached 40 pips. In reality, there were hardly any meaningful movements. As we've stated before, in such low-volatility conditions, trading signals generally fail to yield profit.

How to Trade on Tuesday:

On the hourly timeframe, GBP/USD has finally started forming a new uptrend, which may become the next leg of the broader bullish trend. As previously mentioned, there are no strong reasons to expect sustained U.S. dollar strength, so in the medium term, we look for continuation to the upside. However, at the moment, volatility in the market has sunk to nearly zero, and the price is still showing reluctance to rise.

On Tuesday, the pair may attempt to extend its upward momentum, as the trend has shifted to bullish. However, to open long positions, confirmation is required via a breakout and consolidation above the 1.3413–1.3421 zone. If that occurs, the target for long trades will be the 1.3466–1.3475 area. If the price fails to break above 1.3413–1.3421 and consolidates below it instead, traders may consider short positions. Still, overall volatility is expected to remain very low once again.

On the 5-minute timeframe, the following levels should be monitored for Tuesday: 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. Tuesday's economic calendar is empty for both the UK and the U.S., meaning there is unlikely to be any impactful news to trade on during the day.

Key Rules of the Trading System:

1. Signal strength is determined by how quickly it forms (bounce or breakout). The faster it forms, the stronger the signal.
2. If two or more false signals occurred near a level, all subsequent signals from that level should be ignored.
3. In flat markets, pairs may produce many false signals or none at all. At the first sign of flat trading, it's best to step back.
4. Trades should be opened between the start of the European session and the middle of the U.S. session. All trades must be manually closed afterward.
5. On the 1H timeframe, MACD signals should only be traded if supported by good volatility and a visible trend confirmed by trendlines or channels.
6. If two levels are too close together (5–20 pips), treat them as a support/resistance zone.
7. After gaining 20 pips in the correct direction, set your Stop Loss to breakeven.

What's on the Charts:

• Support and resistance levels – key targets for entry and exit; ideal for placing Take Profit orders.
• Red lines – trendlines or channels highlighting the current market trend and preferred trading direction.
• MACD (14,22,3) – histogram and signal line – used as an additional confirmation tool for entry and exit signals.

Important Note for Beginners:

Major news events (always shown on economic calendars) can significantly impact currency movements. During critical news releases, trade with extreme caution—or exit the market entirely—to avoid abrupt reversals.

Remember: not every trade will be profitable. Developing a well-defined trading strategy and disciplined risk/money management are essential to achieving long-term success in forex trading.