Trade Analysis for Wednesday:

1H chart of the GBP/USD pair

The GBP/USD pair also tried to start a correction on Wednesday, but the British pound had another reason to strengthen against the euro. In the UK yesterday, the second-quarter GDP report was also published, showing stronger growth than previously forecast. As a result, the pound rose in the morning, but it pulled back by the end of the day. The pair's total rise amounted to only 35 pips, which looks very weak after a monthly decline. Is there a chance of further growth of the British currency? There is a chance, but for now the pound may only correct. On Friday, the US will release unemployment and labor market reports that could help the pound continue to rise. However, we would like to remind you that they can also support the US dollar. And the market is currently much more willing to buy the dollar. In the long term, growth prospects remain, but for now the market isn't even considering buying the British currency.

5M chart of the GBP/USD pair

On the 5-minute TF on Wednesday, one buy signal was formed. During the European session, price consolidated above the 1.3259-1.3267 area, allowing traders to open long positions. However, as noted, the market did not want to continue the bullish impulse, so by the end of the day, the price returned to its initial positions.

How to Trade on Thursday:

On the hourly TF, GBP/USD continues its downward trend, which has become a full-fledged trend. The fundamental backdrop for the dollar has improved because the Fed indicated it is ready to continue tightening monetary policy. Two weeks have passed since then, and the market still sees only this factor. If, of course, it is indeed the reason for the dollar's rise — which we very much doubt. Therefore, we consider the current movement completely illogical.

On Thursday, novice traders can consider short positions with a target of 1.3175-1.3180 if the price consolidates below the 1.3259-1.3267 area. Open long positions with a target of 1.3319-1.3331 if price bounces off the 1.3259-1.3267 area.

On the 5-minute TF you can now trade the levels 1.3096-1.3107, 1.3175-1.3180, 1.3259-1.3267, 1.3319-1.3331, 1.3380-1.3386, 1.3456-1.3476, 1.3587-1.3598, 1.3631-1.3641. No major events or publications are scheduled in the UK on Thursday, and in the US, the key ISM index and secondary initial jobless claims will be released.

Key Rules of the Trading System:

1. The strength of a signal is determined by the time it takes to form the signal (rebound or breakout). The less time taken, the stronger the signal.
2. If two or more trades were opened at a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a range (flat), any pair can generate many false signals or may not produce any at all. Technical levels may be disregarded.
4. On the hourly timeframe, trading signals from the MACD indicator should be acted upon only when volatility is high, and a trend line or trend channel confirms the trend.
5. If two levels are too close together (within 5-20 pips), treat them as a support or resistance area.
6. After moving 15 pips in the right direction, a stop-loss should be set to break even.

What to Look for on the Charts:

Price levels (areas) of support and resistance serve as targets for opening buy or sell trades or as sources of signals.

Red lines indicate channels or trend lines that show the current trend and the preferred trading direction.

The MACD indicator (14,22,3) — the histogram and signal line — is an auxiliary indicator that can also provide signals.

Important speeches and reports (listed in the news calendar) can significantly influence currency pair movements. Therefore, during their release, traders should approach trading with utmost caution, or exit the market to avoid sudden reversals against the preceding move.

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