Analyzing Monday's trades:

GBP/USD on 1H chart

GBP/USD also continued to trade a bit higher on Monday. However, the technical picture for the British currency differs somewhat from the euro's. The British pound has been in a flat range between 1.2457 and 1.2611 for two weeks. This flat range might not be obvious on the lower timeframes, but it becomes clear when switching to higher charts. The GBP/USD pair has had a tendency to move towards sideways channels for the past six months, and it seems like we are facing another one. A bearish reversal with a drop of 150 pips could follow near the 1.2611 level. This does not require any fundamental or macroeconomic events to support the US dollar, which should strengthen against the pound even without them.

There were no significant events in either the UK or the US. As usual, several Federal Reserve officials spoke, but they tend to repeat more or less the same points each time.

GBP/USD on 5M chart

Two buy signals were generated on the 5-minute timeframe. First, the price overcame the 1.2541-1.2547 area, and then it bounced off of it from above. They were good signals that also reinforced each other, but it was extremely difficult to make profit from them as the pair's movement almost immediately stopped. Nevertheless, it was advisable to hold on to long positions on Tuesday, as currently, this might be the only viable option—keeping open trades beyond a single trading day.

Trading tips on Tuesday:

On the hourly chart, the GBP/USD pair has great prospects for forming a downward trend, but the correction persists. The fundamental backdrop continues to support the dollar much more than the British pound. Therefore, we only expect downward movement from the pair. The Bank of England showed a firm dovish stance, while the Fed remains hawkish.

If we are talking about logical movements, then we expect the pound to fall on Tuesday. However, overcoming the 1.2541-1.2547 area allows beginners to hold on to long positions for a while with 1.2605 as the target. Traders may consider short positions when the price consolidates below 1.2541-1.2547.

The key levels on the 5M chart are 1.2270, 1.2310, 1.2372-1.2387, 1.2457, 1.2502, 1.2541-1.2547, 1.2605-1.2611, 1.2648, 1.2691, 1.2725, 1.2787-1.2791. Today, the UK will release interesting reports on unemployment and wages. The US docket will feature Federal Reserve Chair Jerome Powell's speech and the Producer Price Index. These should be enough to stir some market reaction on Tuesday.

Basic trading rules:

1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.

2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.

3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.

4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, after which all open trades should be manually closed.

5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trendline or trend channel.

6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.

How to read charts:

Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.

Red lines represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.

The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.

Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.

Beginners should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.