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On Thursday, the GBP/USD pair traded with an upward bias. However, there were no clear or solid reasons for this movement. Recall that on Tuesday, the U.S. dollar showed a sharp and strong rise on news that the U.S. might go to war with Israel, and on Wednesday, a moderate rise followed the "moderately hawkish" outcome of the Federal Reserve meeting. However, Thursday's Bank of England meeting results could not be considered hawkish in any way, which should have allowed the pound to continue its moderate decline.
On Friday, news emerged that Donald Trump had changed his mind about launching a strike on Iran within 48 hours. Now, a decision is expected within the next two weeks. The market calmed down, remembered that Trump is still the U.S. president, and resumed selling the dollar with renewed strength. On higher timeframes, it is visible that the uptrend remains intact, and the dollar still shows very rare and very weak corrections.
On the 5-minute timeframe Thursday, two trading signals were generated, although, for most of the day, price action was sideways. Neither the Fed nor the BoE meetings, which delivered rather bland results, had much impact. A bounce from the 1.3413–1.3421 area in the morning allowed for short positions, but the price only managed to move about 18 pips in the expected direction. Then, over the next 6 hours, a buy signal formed around the same area, but long positions were viable only after the BoE's meeting when it became clear that the pound was unlikely to continue falling. The expected rise began, but most upward moves occurred during overnight trading.
On the hourly timeframe, GBP/USD continues to track developments around Trump and remains highly skeptical of his policies. As before, the market seizes every opportunity to sell the dollar rather than buy it. This pattern will likely continue until the market sees tangible signs of the trade war ending and Trump refrains from making unauthorized decisions. The dollar may show growth occasionally—even if it can't fall every day — but such events remain rare.
On Friday, the GBP/USD pair may continue its upward movement as the downtrend is over. However, with limited news expected, low volatility and range-bound movement are likely.
On the 5-minute TF, you can now trade at levels 1.3043, 1.3102-1.3107, 1.3203-1.3211, 1.3259, 1.3329-1.3331, 1.3413-1.3421, 1.3518-1.3535, 1.3580-1.3592, 1.3643-1.3652, 1.3695, 1.3740. On Friday, the only noteworthy event will be May's UK Retail Sales report. The U.S. calendar is empty.
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.
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