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25.04.2025 07:06 AM
How to Trade the GBP/USD Pair on April 25? Simple Tips and Trade Analysis for Beginners

Analysis of Thursday's Trades

1H Chart of GBP/USD

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The GBP/USD pair continued to trade upward on Thursday despite the absence of any objective reasons for such movement. There were no significant events or news in the UK, Donald Trump made no statements regarding the trade war, and U.S. macroeconomic data supported the dollar. The pair began to decline slightly during the night, but any downward movement should be approached cautiously. We do not see any fundamental reasons that would allow the dollar to reverse the trend. To be more precise, many data points and factors support the U.S. currency, yet the market ignores them, entirely focused on the topic of trade wars. Therefore, we believe that the dollar has little to rely on until Trump moves toward de-escalating the global trade war. One might say the first signs of softer demands toward China have already emerged, but at the same time, China itself stated it is not engaged in any negotiations with the United States.

5M Chart of GBP/USD

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On Thursday's 5-minute timeframe, several trading signals were formed. Initially, the pair broke through the 1.3289–1.3297 zone and then bounced off it from above four times. Only by the end of the day did the price move about 30 pips upward from the buying signal zone. Thursday's movements were weak, and the British pound has generally not shown intense volatility lately.

Trading Strategy for Friday:

In the hourly timeframe, the GBP/USD pair could have started a downward trend long ago, but the market continues to focus solely on Trump. As a result, the pound continues to climb steadily. A single day of decline does not indicate the beginning of a bearish trend. Therefore, future movements of the pair still depend exclusively on the U.S. President and his decisions—nothing else.

On Friday, the GBP/USD pair may trade south for a while as the first signs of easing global trade tensions appear. However, a steady flow of de-escalation news is required for the dollar to grow significantly.

On the 5-minute timeframe, current trading levels are 1.2848–1.2860, 1.2913, 1.2980–1.2993, 1.3043, 1.3102–1.3107, 1.3145–1.3167, 1.3203, 1.3289–1.3297, 1.3365, 1.3421–1.3440, 1.3488, 1.3537, 1.3580–1.3598. On Friday, the UK is scheduled to publish a retail sales report, and in the U.S., the University of Michigan Consumer Sentiment Index will be released. The market could easily ignore both of these reports.

Core Trading System Rules:

  1. Signal Strength: The shorter the time it takes for a signal to form (a rebound or breakout), the stronger the signal.
  2. False Signals: If two or more trades near a level result in false signals, subsequent signals from that level should be ignored.
  3. Flat Markets: In flat conditions, pairs may generate many false signals or none at all. It's better to stop trading at the first signs of a flat market.
  4. Trading Hours: Open trades between the start of the European session and the middle of the US session, then manually close all trades.
  5. MACD Signals: On the hourly timeframe, trade MACD signals only during periods of good volatility and a clear trend confirmed by trendlines or trend channels.
  6. Close Levels: If two levels are too close (5–20 pips apart), treat them as a support or resistance zone.
  7. Stop Loss: Set a Stop Loss to breakeven after the price moves 20 pips in the desired direction.

Key Chart Elements:

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.

Note for Beginner Forex Traders: Not every trade can be profitable. Developing a clear strategy and sound money management is key to long-term success in trading.

Paolo Greco,
Analytical expert of InstaForex
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