GBP/USD 5-Minute Chart Analysis

On Monday, the GBP/USD currency pair once again failed—possibly for the third or fourth time—to break through the 1.3420–1.3425 area. A rebound followed, suggesting that the British currency could rise, at least up to the Senkou Span B line, even in the absence of fundamental or macroeconomic support. In any case, no significant news is expected today from either the United States or the United Kingdom.

Overall, the British pound continues to trade rather poorly. The pair still has enough reason to revive the upward trend of 2025, but traders remain hesitant to initiate buying activity. There were no significant events on Monday in either the U.S. or the U.K.

From a technical perspective, the situation on the hourly timeframe is far from optimal. Last week, nearly every day brought news that pointed toward a weakening dollar. Yet overall price movement remained sideways rather than trending upward or downward. The market is currently in a state of stagnation, and the U.S. economy is experiencing a "shutdown." Traders may be avoiding bold moves until there's more clarity on how long the shutdown will last—but that explanation is somewhat unconvincing.

On the 5-minute timeframe, only one trading signal was formed yesterday. For several hours, the price attempted to rebound from the 1.3420–1.3432 area and ultimately succeeded. For the rest of the day, the British pound rose steadily, and we believe this movement is likely to continue.

COT Report

COT reports for the British pound show that the sentiment of commercial traders has changed repeatedly over recent years. The red and blue lines, which reflect the net positions of commercial and non-commercial traders, often intersect and typically remain close to the zero mark. Currently, they are nearly at the same level again, which indicates an approximately equal number of long and short positions.

The dollar continues to decline due to Donald Trump's policies, so at the moment, demand for the pound from market makers is not particularly crucial. The trade war may continue in one form or another for quite some time. Regardless, the Federal Reserve is expected to lower interest rates over the coming year, and demand for the dollar will likely decrease.

According to the latest report for the British pound, the "Non-commercial" group opened 3,700 BUY contracts and closed 900 SELL contracts. Thus, the net position of non-commercial traders increased by 4,600 contracts over the week.

In 2025, the pound rose significantly, but it's essential to understand that there is one underlying reason for this—Donald Trump's economic policies. Once that factor is neutralized, the dollar might begin to strengthen again, but when that will happen is anyone's guess. The rate of increase or decrease in the pound's net position doesn't really matter. The dollar's net position continues to decline—often at a faster pace.

GBP/USD 1-Hour Chart Analysis

On the hourly timeframe, the GBP/USD pair maintains a newly established upward trend. The trendline has been breached, giving traders the right to expect further growth in the pair. The dollar still lacks any global support for strengthening, so we anticipate a resumption of the 2025 upward trend in virtually any scenario.

Last week, the pair bounced off the critical Senkou Span B line, which triggered a corrective pullback. It subsequently rebounded twice from the Kijun-sen line.

For October 7, we identify the following key levels:

1.3125, 1.3212, 1.3369–1.3377, 1.3420, 1.3533–1.3548, 1.3584, 1.3681, 1.3763, 1.3833, and 1.3886. The Senkou Span B line (1.3524) and Kijun-sen line (1.3425) can also act as trading signals.

Stop Loss orders should be moved to breakeven once the price moves 20 pips in the desired direction. The Ichimoku indicator lines may shift throughout the day, which must be taken into account when interpreting the signals.

There are no scheduled high-impact events or reports on Tuesday in either the United Kingdom or the United States. Therefore, traders will have little news to react to—but we still anticipate continued growth in the British pound.

Trading Recommendations

Today, traders may continue to expect upward movement. The price has bounced from the Kijun-sen line of the Ichimoku indicator, suggesting that upward momentum may continue—at least up to the Senkou Span B line. Since no macroeconomic news is expected today, the pair is likely to remain in a sideways channel overall.

Explanation of Illustrations

Support and resistance levels – thick red lines where price movement may come to a halt. These are not sources of trading signals.

Kijun-sen and Senkou Span B lines – Ichimoku indicator lines transferred from the 4-hour to the 1-hour timeframe. These are considered strong lines.

Extreme levels – thin red lines from which the price previously bounced. They function as trading signal points.

Yellow lines – trend lines, trend channels, and various other technical patterns.

Indicator 1 on the COT charts shows the net position size for each category of traders.