GBP/USD 5-Minute Chart Analysis

The GBP/USD currency pair also showed limited volatility on Thursday, though it continued to edge higher—slowly but steadily. Clearly, the British pound and market bulls still have energy to spare. Over recent weeks, buyers have been largely inactive despite having solid reasons to support the pound at least occasionally. Across the Atlantic, news from the U.S. continues to disappoint. Meanwhile, the U.K. has released a batch of macroeconomic data this week, some of which could have justified a GBP sell-off. From our perspective, the fact that the pound continued rising despite mediocre reports is a strong signal.

From a technical standpoint, the situation is straightforward. The price has broken through the descending trendline and both lines of the Ichimoku indicator. It has all the technical, macroeconomic, and fundamental reasons to strengthen. The upward trend on the daily timeframe also remains intact. Of course, a correction or sideways movement may prolong the consolidation, but in our view, the dollar's fate is already sealed. The British economy hasn't been particularly impressive, but the Bank of England is unlikely to pursue further monetary easing. Meanwhile, the U.S. economy poses far more concerns than the U.K.'s.

On the 5-minute timeframe, price action mostly ranged sideways throughout the day. The price bounced four or five times from the 1.3402–1.3420 area but was unable to build significant upward momentum. Nonetheless, the uptrend above the Ichimoku cloud remains intact. Friday could be a dull day with volatility levels similar to Thursday.

COT Report

Commitment of Traders (COT) reports for the British pound show that market sentiment among commercial traders has been fluctuating for years. The red and blue lines indicating net positions of commercial and non-commercial traders cross frequently and tend to hover around zero. This currently reflects a nearly even split in buy and sell positions.

The dollar continues to decline due to Trump administration policies, so at this stage, market maker demand for the pound is less relevant. The trade war is likely to persist in one form or another for a long time. The Fed is expected to continue cutting rates over the next year. Therefore, demand for the U.S. dollar is likely to weaken regardless.

According to the latest report on GBP, the "Non-commercial" group opened 3,700 new long (BUY) contracts and closed 900 short (SELL) contracts. As a result, the net long position increased by 4,600 contracts over the week.

In 2025, the pound has already grown substantially. The reason is singular—Trump's policy. Once this factor is neutralized, the dollar may begin to recover, but when that will happen remains unknown. Whether the pound's net position is rising or falling matters relatively little now. The U.S. dollar's net position continues to decline—usually at a faster pace.

GBP/USD 1-Hour Chart Analysis

On the hourly timeframe, GBP/USD has finally ended its downtrend and begun to rally. The U.S. dollar still lacks any significant justification for strengthening, so we expect the pair to revisit its 2025 highs—barring an extended range-bound phase on the daily chart. However, given the ongoing tensions over Trump's escalating trade war and the Fed's shift toward monetary easing, the pressure on the dollar remains high—a volatile mix of bearish signals.

For October 17, we highlight the following key trading levels: 1.3125, 1.3212, 1.3307, 1.3369–1.3377, 1.3420, 1.3533–1.3548, 1.3584, 1.3681, 1.3763, 1.3833, 1.3886. The Ichimoku indicator's Senkou Span B (1.3393) and Kijun-sen (1.3350) lines may also serve as signal levels. A Stop Loss should be moved to breakeven after 20 pips in profit to limit risk in case of a false signal. Note that Ichimoku lines may shift throughout the trading day and should be reevaluated as necessary.

No major events are scheduled on Friday in either the U.K. or U.S., meaning another low-volatility session may be ahead.

Trading Recommendations:

For Friday, traders may consider trading from the 1.3420 level or from the Senkou Span B line. While key levels abound, market-moving news remains scarce. The British pound has begun a clear upward move, so we expect this short-term trend to continue—but flat conditions are possible today.

Chart Illustration Key:

• Thick red lines represent key support/resistance price levels. These are reference levels where movement may pause or reverse. They do not generate signals themselves.
• Kijun-sen and Senkou Span B are Ichimoku indicator lines transferred from the H4 timeframe to the H1 chart. These are strong support/resistance lines.
• Thin red lines mark price extremes, from where price has previously rebounded. These serve as signal levels.
• Yellow lines represent trend lines, trend channels, and other technical patterns.
• The COT Indicator 1 on the reports shows the net position size of each trader category.