Analysis of Tuesday's Trades:

1H Chart of the GBP/USD Pair

The GBP/USD pair demonstrated a significant drop on Tuesday, which frankly speaking, it did not deserve. The only negative factor for the British pound that day was the UK unemployment report, which unexpectedly jumped to 5.2%. This negative development led to a 130-pip decline during the day, and the pound only recovered slightly in the evening. The other British reports were of no significance to traders, and the British pound has been declining for an entire week, often without substantial grounds. Today, the pound will face another test of strength. In a couple of hours, the UK inflation report will be published. If this indicator turns out to have slowed significantly in January, the likelihood of a rate cut by the Bank of England at its next meeting will effectively equal 100%. At the same time, this factor has already caused the pound to fall for an entire week. Therefore, we wouldn't be surprised to see a rise rather than a fall.

5M Chart of the GBP/USD Pair

On the 5-minute timeframe, two trading signals were formed on Tuesday, but on Monday, the price had already formed a sell signal in the area of 1.3643-1.3652, which we advised carrying over to the next day. This signal allowed beginner traders to make a good profit. During the day, the price first broke through the 1.3529-1.3543 range in one direction, then in the other. The last buy signal could also have been acted upon and carried over to the next day.

How to Trade on Wednesday:

On the hourly timeframe, the GBP/USD pair has broken the downward trend and... formed a new one. There are no global grounds for medium-term dollar growth, so we expect the global upward trend from 2025 to continue, which could push the pair to the 1.4000 mark. In recent weeks, the situation has often not favored the British currency, and the market, after several active weeks in mid-January, has again fallen into a state of stagnation.

On Wednesday, beginner traders may remain in long positions, as the pair has passed through the 1.3529-1.3543 area, targeting 1.3643-1.3652. A consolidation below the area of 1.3529-1.3543 will allow for opening shorts with a target of 1.3484-1.3489.

On the 5-minute timeframe, levels to trade include 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, 1.3741-1.3751, 1.3814-1.3832, 1.3891-1.3912, and 1.3975.

On Wednesday, a report on January inflation is scheduled for publication in the UK, a key event of the day. In the U.S., there are only a few secondary reports, which, however, may also provoke a reaction.

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.