23.02.202606:43 Forex Analysis & Reviews: How to Trade the GBP/USD Currency Pair on February 23? Simple Tips and Trade Analysis for Beginners

Analysis of Friday's Trades:

1H Chart of the GBP/USD Pair

The GBP/USD pair rose on Friday, but it was not enough to break the downward trend. We believe the market reacted very weakly to strong UK data and disappointing US data. Recall that on Friday, British reports on business activity and retail sales were quite positive, while the US GDP report significantly underperformed. Additionally, in the evening, Donald Trump blatantly disregarded the US Supreme Court's ruling and swiftly reinstated all the trade tariffs that the court had canceled. Therefore, if any traders were buying dollars in the hope of ending the trade war, they did so in vain. In our view, the outlook for the US currency worsens day by day. It was revealed yesterday that the level of reserves held by central banks in US dollars has fallen to the lowest level in the last 20 years.

5M Chart of the GBP/USD Pair

On the 5-minute timeframe, several signals were formed on Friday. The first signal was generated during the European trading session when the price bounced twice from the area of 1.3437-1.3446. After that, the area of 1.3484-1.3489 was quickly addressed. Two subsequent bounces from this area mirrored each other, but those signals turned out to be false. Following this, a series of buy signals was generated around the same area, with the level of 1.3529 being reached last night. Thus, all long positions were profitable.

How to Trade on Monday:

On the hourly timeframe, the GBP/USD pair continues to form a downward trend. There are no global factors driving medium-term dollar growth, so in 2026, we expect the continuation of the global upward trend from 2025, which could push the pair to a low of 1.4000. In recent weeks, the situation has often not favored the British currency, explaining the somewhat unexpected decline of the pound.

On Monday, beginner traders may consider opening long positions if the pair exceeds the area of 1.3529-1.3543, targeting 1.3643-1.3652. A price rebound from the area of 1.3529-1.3543 would allow for short positions with a target of 1.3484-1.3489.

On the 5-minute timeframe, the following levels can currently be traded: 1.3319-1.3331, 1.3365, 1.3403-1.3407, 1.3437-1.3446, 1.3484-1.3489, 1.3529-1.3543, 1.3643-1.3652, 1.3695, 1.3741-1.3751, 1.3814-1.3832, 1.3891-1.3912, 1.3975. No significant events are scheduled in the UK or the US for Monday, but in our view, last week's events provide sufficient reasons for the dollar to continue its decline.

Main Rules of the Trading System:

1. The strength of the signal is determined by the time it takes to form (rebound or breaking through the level). The shorter the time, the stronger the signal.
2. If two or more trades were opened around a particular level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat market, any pair can generate numerous false signals or no signals at all. In any case, it is best to stop trading at the first signs of a flat.
4. Trades are opened during the time period between the start of the European session and until the middle of the American session, after which all trades should be manually closed.
5. On the hourly timeframe, signals from the MACD indicator should ideally be traded only when there is good volatility and a trend confirmed by a trend line or channel.
6. If two levels are too close to each other (ranging from 5 to 20 pips), they should be considered as a support or resistance area.
7. After moving 20 pips in the correct direction, it is advisable to set the Stop Loss to break-even.

What's on the Charts:

• Support and resistance levels are targets for opening buy or sell trades. Take Profit levels can be placed around them.
• Red lines indicate channels or trend lines that reflect the current trend and indicate the preferred direction for trading now.
• The MACD indicator (14,22,3) – the histogram and signal line – serves as a supplementary indicator that can also be used as a source of signals.
• Important speeches and reports (always found in the news calendar) can significantly influence the movement of the currency pair. Therefore, during their release, trading should be conducted with maximum caution, or it is advised to exit the market to avoid a sharp price reversal against the preceding movement.
• Beginners trading in the Forex market should remember that not every trade can be profitable. Developing a clear strategy and practicing sound money management are the keys to long-term trading success.