Analysis of GBP/USD 5M

The GBP/USD currency pair on Thursday followed the euro. The British pound had no independent drivers, so it showed a high correlation with its elder sibling — the euro. The pound's uptrend also ended yesterday, as price broke the critical line and trendline. Thus, a new downtrend may now begin. Is this fair from a fundamental and macroeconomic perspective? In our view, not really. Of course, if US inflation rises for August and the Federal Reserve decides to tighten policy, the dollar will have grounds to strengthen. However, the market has spent the whole summer expecting Fed tightening and has priced this decision in about five times already. Even with Fed tightening, we do not see strong reasons for the US currency to rise. If you add Donald Trump's overall policy and his desire to further accelerate inflation by giving every American $5,000, it turns out that any Fed rate hike is essentially pointless, since inflation will now grow not only because of high oil prices but also because of Trump's "helicopter money."

Technically, the pound completed the formation of the uptrend, since the trend line was breached. The dollar may continue to strengthen against its competitors, although there are currently no grounds for this. Grounds may appear today and next Wednesday, but nothing is certain.

On the 5-minute TF on Thursday, two sell trading signals were formed. First, the pair broke the Kijun-sen line, and then it bounced off it from below. Thus, traders had two opportunities to open short positions. If US inflation accelerates today, that will help the pair continue to fall.

COT report

COT reports for the pound show that non-commercial traders have dominated the market with sales for several months now. The net position is negative, despite the preservation of the uptrend in the long term. Given the events in the Middle East, it is not surprising that dollar demand was quite high in the first half of 2026. The war formally ended, but the conflict persists. Only geopolitics can support the US dollar in the near term. However, until the pair closes below the trend line, we would not count on a strong decline.

In the long run, the dollar continues to weaken due to Donald Trump's policy, which is clearly visible on the weekly timeframe. The trade war will continue in one form or another for a long time, and Trump's policy is aimed directly and indirectly at weakening the US currency. The long-term uptrend remains, as evidenced by the trend line. The price recently tested that line and bounced off it. According to the latest COT report (dated September 1), the "Non-commercial" group closed 8,200 BUY contracts and 3,100 SELL contracts. Thus, the non-commercial traders' net position decreased by 5,100 contracts over the week.

Analysis of GBP/USD 1H

On the hourly timeframe, the GBP/USD pair moved into a downtrend. In the medium and long term, the pound continues to "look" upward, so we believe that any pound rise will be logical. We still do not see strong reasons for a prolonged, sharp rise in the US currency. However, inflation data and Fed and Bank of England meetings are ahead.

For September 11 we highlight the following important levels: 1.3042-1.3050, 1.3096-1.3115, 1.3179-1.3187, 1.3301-1.3309, 1.3369-1.3377, 1.3465-1.3480, 1.3588, 1.3671-1.3681. The Senkou Span B line (1.3563) and the Kijun-sen (1.3528) can also generate signals. It is recommended to move the stop-loss to breakeven when the price moves 20 pips in the correct direction. The Ichimoku indicator lines may move during the day, which you should take into account when determining trading signals.

On Friday, the UK will publish industrial production and GDP reports for July, but we do not consider these data important. Yesterday showed that even positive news for the euro and pound is now interpreted against them. The market will most likely pay little attention to reports like industrial production. In the US today — the weekly US inflation report, which may trigger significant movement.

Trading recommendations:

Traders today may remain in short positions with targets 1.3465-1.3480 and 1.3377 based on yesterday's sell signals. Long positions can be opened in case of a bounce from the 1.3465-1.3480 area with targets 1.3528 and 1.3563. But today the pair's movements will largely depend on the US consumer price index.

Explanations for Illustrations:

Support and resistance price levels are thick red lines where movement may conclude. They are not sources of trading signals.

The Kijun-sen and Senkou Span B lines are Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour timeframe. They are strong lines.

Extreme levels are thin red lines from which the price has previously rebounded. They are sources of trading signals.

Yellow lines indicate trend lines, trending channels, and any other technical patterns.

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