Analysis of GBP/USD 5M

The GBP/USD currency pair also experienced a slight recovery on Monday, but unfortunately only a modest one. The British pound continues to be weighed down by issues linked to the UK's budget for the upcoming year, which is why the euro showed somewhat stronger growth on the first trading day of the week. Certain hopes were tied to speeches by Bank of England Chief Economist Huw Pill and BoE Governor Andrew Bailey, but neither official shared anything fundamentally new with traders. As a result, we had another "boring Monday" with minimal volatility.

While it can be said that an upward trend remains in place for the euro, this is not the case for the British pound. Fortunately for the pound, its drop was halted by the Senkou Span B line, as we had previously warned. As such, a new upward trend may begin from this line. Although the issues with the budget and the rising yield of treasury bonds are serious, we must remember that the situation in the U.S. is even worse — due to Donald Trump, whose actions and decisions continue to influence the market quite one-dimensionally. Therefore, we still support the idea of a new upward movement for the pair. If the price consolidates below the Senkou Span B line, only then can we speak of a continued local downward trend.

In the 5-minute timeframe on Monday, there was one excellent signal. Early in the European trading session, the price rebounded from the Senkou Span B line and trended upward for the rest of the day. We believe the bulls are fully capable of driving the pair toward the 1.3533–1.3548 level.

COT Report

COT reports for the British pound show that commercial traders' sentiment has been constantly shifting in recent years. The red and blue lines, which represent the net positions of commercial and non-commercial traders, frequently cross and are mostly near the zero mark. At the moment, they are almost at the same level, indicating an approximate balance between buy and sell positions.

The U.S. dollar continues to decline due to Donald Trump's policies. Therefore, in general, demand for the British pound among market makers is not all that significant right now. The trade war will continue in one way or another for quite some time. The Federal Reserve will likely cut interest rates over the next year. Demand for the dollar will fall regardless. According to the latest report on the British pound, the "Non-commercial" group opened 5.9 thousand buy positions and closed 21.1 thousand sell positions. Thus, the net position of non-commercial traders increased by 27,000 contracts over the week.

In 2025, the pound saw a significant rise, but that growth was due to a single reason — Donald Trump's policies. Once this factor is neutralized, the dollar may begin to grow, though no one knows when that will happen. It doesn't matter how fast the net position of the pound rises or falls. For the dollar, it's declining in any case — and usually at a faster rate.

Analysis of GBP/USD 1H

On the hourly chart, the GBP/USD pair pulled back last week due to a negative fundamental background. It can be said that a new downward trend has begun. The Senkou Span B line is currently keeping the British currency in the game, but breaking below it would open the door for further decline. The dollar still lacks any global reasons for strengthening, but technical factors should not be ignored.

For September 23, we designate the following important levels: 1.3125, 1.3212, 1.3369–1.3377, 1.3420, 1.3533–1.3548, 1.3584, 1.3681, 1.3763, 1.3833, 1.3886. The Senkou Span B line (1.3460) and Kijun-sen line (1.3586) can also serve as sources of trading signals. The Stop Loss level is recommended to be set to breakeven when the price moves 20 points in the correct direction. Note that the lines of the Ichimoku indicator may shift during the day, which should be taken into account when identifying trading signals.

On Tuesday, the UK and the U.S. will publish their Manufacturing and Services PMI (Purchasing Managers' Index) for September. These are fairly interesting data, but significant market reactions are only expected if the actual numbers differ strongly from the forecast. A more important event is Jerome Powell's speech scheduled for the evening.

Trading Recommendations:

On Tuesday, traders may look for continued upward movement toward the 1.3533–1.3548 level. A rebound from this zone would provide a good opportunity to open shorts targeting 1.3460, while a breakout through it would justify staying in long positions with a target of 1.3584.

Illustration Key:

• Price support and resistance levels – thick red lines around which price movement may stop. They are not sources of trading signals.
• Kijun-sen and Senkou Span B lines – Ichimoku indicator lines transferred from the 4-hour timeframe to the hourly. These lines are considered strong.
• Extremum levels – thin red lines from which the price previously bounced. These are sources of trading signals.
• Yellow lines – trendlines, trend channels, and other technical patterns.
• Indicator 1 on COT charts – the size of the net position for each trader category.