GBP/USD 5-Minute Analysis

The GBP/USD currency pair continued its downward movement throughout Monday. Despite the absence of macroeconomic news in both the UK and the US, the market still found new reasons to sell the British pound. It is quite difficult to pinpoint what these reasons are, since the fundamental background was essentially the same for both major currency pairs. We believe that this is purely a technical correction, similar to what is happening with the euro. On the hourly timeframe, the downward move may seem strong, but switching to the daily chart reveals that this impression is misleading. Nevertheless, the descending channel remains relevant, and the price is situated below the Ichimoku indicator lines. At this point, there is no reason to expect a reversal of the pair's decline.

Since we view the current movement as technical, it means we should wait for technical signals indicating its completion. Given the higher volatility of the pound and the fact that the move is technical in nature, short positions remain valid. All levels and lines for potential trades are listed below.

On the 5-minute timeframe, several good trading signals were formed on Monday. During the European session, the price bounced three times from the 1.3489 level. These signals overlapped, so only one short trade should have been opened. During the U.S. session, the price dropped to the 1.3439 level and bounced off it, at which point short trades could be closed. Whether to open a long position based on the rebound from 1.3439 is debatable, as the hourly trend remains downward.

COT Report

COT reports for the British pound show that in recent years, commercial traders' sentiment has changed constantly. The red and blue lines, representing the net positions of commercial and non-commercial traders, frequently cross and usually stay close to the zero line. Currently, they are also close to each other, indicating a roughly equal number of buy and sell positions. However, over the past 18 months, the net position has been growing and in recent months has been "bullish."

The dollar continues to decline due to Donald Trump's policies, so for now, the demand from market makers for the British pound is not particularly important. The trade war will continue in some form for a long time. Demand for the dollar will decline in one way or another. According to the latest report on the British pound, the "Non-commercial" group opened 800 BUY contracts and closed 900 SELL contracts. Thus, the net position of non-commercial traders increased by 1,700 contracts over the reporting week, which is practically insignificant.

The pound rose significantly in 2025, but it should be understood that the reason was Trump's policies. Once that factor is neutralized, the dollar could start to strengthen—but no one knows when that will happen. The dollar is only at the beginning of a challenging period. There are still 3.5 years left of Trump's administration.

GBP/USD 1-Hour Analysis

On the hourly timeframe, GBP/USD continues to decline, as indicated by the descending channel. The market ignored Trump's new tariffs last week and continues to ignore them this week. We believe that the new tariffs will be priced in once the current technical correction is complete. Therefore, for now, one can trade downward based on technical signals, but it's important to remember that the dollar still lacks fundamental support for growth.

For July 15, the following key levels are highlighted: 1.3212, 1.3288, 1.3358, 1.3439, 1.3489, 1.3537, 1.3615, 1.3741–1.3763, 1.3833, 1.3886. The Senkou Span B line (1.3655) and Kijun-sen line (1.3527) may also serve as signal points. The Stop Loss level is recommended to be moved to breakeven once the price moves 20 points in the correct direction. The Ichimoku indicator lines may shift during the day, which must be considered when identifying trading signals.

On Tuesday, Andrew Bailey is scheduled to speak in the UK, and the U.S. inflation report will be released. We believe the market may react to these events, but they won't significantly alter the broader technical picture. Today, trading from the nearest levels, including short positions, remains a valid strategy.

Illustration Explanations:

• Support and resistance price levels – thick red lines where movement may end. They are not trading signal sources.
• Kijun-sen and Senkou Span B lines—These are strong Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour one.
• Extremum levels – thin red lines where the price has previously rebounded. These act as trading signal sources.
• Yellow lines – trend lines, trend channels, and other technical patterns.
• COT Indicator 1 on the charts – the size of the net position for each category of traders.