Monday trade review:

1H chart of the GBP/USD pair

The GBP/USD pair also traded higher on Monday, driven by the initiation of a criminal investigation against Jerome Powell. Powell himself has already commented on the situation, calling it a result of constant White House pressure on the Fed. The market reacted with a sell-off of the US currency, which is another factor in the US dollar's future decline, a decline that many have accumulated over the past year. The GBP/USD pair has been trading more sideways than up or down in recent weeks, but overall, the uptrend remains. In our view, Donald Trump's policy will continue to have a destructive effect on the US currency. Even Trump's geopolitical ambitions will not increase demand for the US currency as a "safe asset." Recall that Trump staged a coup in Venezuela at the beginning of the year, and now intends to annex Greenland and "restore order" in Cuba and Mexico. There was no macroeconomic background on Monday.

5M chart of the GBP/USD pair

On the 5-minute TF on Monday, a buy trading signal was formed, which remains relevant on Tuesday. The price broke through the 1.3437–1.3446 area during the European trading session, allowing novice traders to open long positions. The target of the move is the area 1.3529–1.3543. However, we would like to remind you that market volatility remains fairly low, except on days when extraordinary news arrives. Like yesterday.

How to trade on Tuesday:

On the hourly TF, the GBP/USD pair settled below the trendline, but there is no clear downtrend at the moment. Rather, another flat. There are no global grounds for medium-term dollar strength, so we expect movement only to the north. Overall, we also expect the resumption of the 2025 global uptrend, which could bring the pair to the 1.4000 mark within the next couple of months.

On Tuesday, novice traders can consider new short positions targeting the area 1.3319–1.3331 if the price settles below the area 1.3437–1.3446. A close above the area 1.3437–1.3446 on Monday keeps long positions relevant with a target of 1.3529–1.3543.

On the 5-minute TF, you can now trade at the levels 1.3043, 1.3096–1.3107, 1.3203–1.3212, 1.3259–1.3267, 1.3319–1.3331, 1.3437–1.3446, 1.3529–1.3543, 1.3574–1.3590, 1.3643–1.3652, 1.3682, 1.3763. No important data or events are scheduled in the UK for Tuesday, but the US will publish the December inflation report, which could have a strong impact on the January Fed meeting and the decision on the key rate.

Main rules of the trading system:

1. Signal strength is judged by the time required to form the signal (rebound or breakout). The less time required, the stronger the signal.
2. If two or more trades were opened on false signals near a level, then all subsequent signals from that level should be ignored.
3. In a flat, any pair can generate many false signals or none at all. In any case, at the first signs of a flat, it is better to stop trading.
4. Trades are opened between the start of the European session and the middle of the American session; after that, all trades must be closed manually.
5. On the hourly timeframe, MACD-based signals should be traded only when there is good volatility and a trend confirmed by a trendline or trend channel.
6. If two levels are located too close to each other (5–20 pips), they should be considered a support or resistance area.
7. After the price moves 20 pips in the correct direction, set the stop loss to breakeven.

What is shown on the charts:

Support and resistance price levels — levels that serve as targets when opening buys or sells. Take Profit can be placed near them.

Red lines — channels or trendlines that reflect the current tendency and show which direction is preferable to trade now.

MACD indicator (14,22,3) — histogram and signal line — an auxiliary indicator that can also be used as a source of signals.

Important speeches and reports (always listed in the news calendar) can strongly affect a currency pair's movement. Therefore, during their release, trading should be done with maximum caution, or positions should be closed, to avoid a sharp price reversal against the preceding move.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and effective money management are the keys to long-term trading success.