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22.05.202607:00 Forex Analysis & Reviews: How to Trade the GBP/USD Pair on May 22? Simple Tips and Trade Analysis for Beginners

Trade Analysis of Thursday:

1H Chart of GBP/USD

The GBP/USD pair moved both up and down on Thursday, but unlike the euro, the pound is more inclined to rise this week. In our view, this is due to last week's poor performance, where the British pound objectively lost much more than it should have. The market started to factor in the decline in inflation in the UK last week, the Bank of England's decision to refrain from tightening monetary policy, and, as a bonus, it addressed the political crisis in the UK, although nothing particularly alarming has occurred in British politics, society, or the economy so far. Thus, this week, the pound is recovering from what appear to be unjust losses, despite weak reports on unemployment, inflation, and business activity indexes. Additionally, it has received support from geopolitics on several occasions this week. The information remains fragmented, but the parties to the conflict are still negotiating, which means the chances of achieving peace are intact.

5M Chart of GBP/USD

In the 5-minute time frame, no trading signals were formed on Thursday. The price approached important areas twice but failed to activate any trading opportunities. It's disappointing, but there were no valid reasons for novice traders to enter the market yesterday.

How to Trade on Friday:

On the hourly time frame, the GBP/USD pair continues its downward trend, but the geopolitical background has changed this week, leading to a fairly confident rise in the British currency. Without the full resumption of war in the Middle East, the dollar cannot expect growth as it did in February and March. Individual events may still provoke a strengthening, but we do not believe the market will trigger a new wave of risk aversion.

On Friday, novice traders can open short positions targeting 1.3380-1.3386 if the price bounces from the 1.3456-1.3476 area. A consolidation above the area of 1.3456-1.3476 will allow for the opening of new long positions targeting 1.3587-1.3598.

On the 5-minute time frame, levels to trade include 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, 1.3695, 1.3741-1.3751. Today, a relatively unimportant retail sales report will be published in the UK, while in the US, there will be a completely secondary consumer sentiment index from the University of Michigan as the second estimate for May. We believe that there will be no market reaction to these data.

Main Rules of the Trading System:

1. The strength of the signal is determined by the time it took to form the signal (bounce or breakout of the level). The less time it took, the stronger the signal.
2. If two or more trades were opened near any level based on false signals, all subsequent signals from this level should be ignored.
3. In a flat market, any pair can generate many false signals or none at all. Technical levels may be ignored.
4. On the hourly timeframe, it is preferable to trade signals from the MACD indicator only in the presence of good volatility and a trend that is confirmed by a trend line or trend channel.
5. If two levels are too close together (5-20 pips apart), treat them as a support or resistance zone.
6. After a move of 15 pips in the right direction, a Stop Loss should be set to breakeven.

What is on the Charts:

Price levels (areas) of support and resistance – levels that are targets when opening purchases or sales, or sources of signals.

Red lines – channels or trend lines that display the current trend and indicate which direction is preferable to trade now.

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

Important speeches and reports (contained in the news calendar) can significantly influence the movement of the currency pair. Therefore, during their release, trading should be done as cautiously as possible, or one should 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 effective money management are key to long-term trading success.

*Phân tích thị trường được đăng tải ở đây có nghĩa là để gia tăng nhận thức của bạn, nhưng không đưa ra các chỉ dẫn để thực hiện một giao dịch.

Paolo Greco,
Analytical expert of InstaSpot
© 2007-2026

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