Wednesday's Trade Recap:

1H GBP/USD Chart

The GBP/USD pair traded with significantly more volatility on Wednesday than in previous days of the week. The reason is quite simple — the first major release of the week was published: the UK inflation report.

While we still believe that inflation in the UK is excessively high and does not suggest further easing from the Bank of England, the Consumer Price Index (CPI) for September did not rise as expected. This triggered a sell-off in the British pound driven by stronger dovish market expectations.

However, in the second half of the day, the U.S. dollar began falling for unknown reasons. We continue to view this price action as irrational and attribute it to the flat seen on the daily timeframe, which is distorting market behavior.

5M GBP/USD Chart

On the 5-minute timeframe, several trade signals formed on Wednesday, though most were of low quality. The first sell signal formed just as the inflation-driven drop in GBP was ending. Two sell signals developed within the 1.3329–1.3331 zone but failed to deliver any meaningful downside.

However, these two false signals led to a valid buy setup at the same level. That long signal turned out to be the day's most successful, generating a 20–25 pip gain for those who acted on it.

How to Trade on Thursday:

On the 1-hour chart, GBP/USD has finally started forming a new upward trend, which may serve as the beginning of another leg in the broader long-term uptrend. As previously stated, there are currently no strong, sustainable reasons for the US dollar to rally, so medium-term expectations remain tilted to the upside for the pair. However, volatility has dropped significantly, and price action remains sluggish.

On Thursday, the pair may attempt to continue its upward movement, as the technical structure now supports a bullish phase. However, to open long positions, a new price rebound from the 1.3329-1.3331 range is necessary. If the price remains consolidated below this area, it will create opportunities to open new short positions.

Key intraday levels to monitor on the 5M chart: 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. On Thursday, the UK and US event calendars are empty again. As a result, volatility may remain subdued, and trending intraday movement could be limited.

Key Trading System Rules:

1. Signal strength is assessed based on how quickly it forms (bounce or breakout). The less time it takes, the stronger the signal.
2. If multiple false signals appear at a level, all future signals from that level should be ignored.
3. In flat conditions, currency pairs may create mass false signals—or no signals at all. Upon detecting a flat, it's often better to stop trading.
4. Trades should be opened between the start of the European session and the middle of the U.S. session. All positions should be manually closed afterward.
5. On the H1 chart, MACD signals should only be followed during trending periods confirmed by trendlines or defined channels.
6. If two levels sit close together (5–20 pips), treat them as a support or resistance zone rather than separate levels.
7. After the price moves 20 pips in the correct direction, move your Stop Loss to breakeven to reduce risk.

Chart Key (What You See on the Charts):

• Support and Resistance Levels — used as near-term trade targets or areas for placing Take Profit orders
• Red lines — trendlines or channels indicating current directional bias
• MACD (14,22,3) — serves as a supplementary indicator for signal confirmation through histogram and signal line interpretation

Important note: High-impact news events and economic releases (always listed in news calendars) can significantly impact the volatility of currency pairs. During such releases, trade carefully—or exit the market altogether—to avoid aggressive price reversals.

Beginner traders on the Forex market should remember: not every trade will be profitable. The key to long-term success lies in having a clear trading strategy and applying strict money management principles.