GBP/USD 5-Minute Analysis

On Friday, the GBP/USD currency pair mainly traded downward throughout the day but closed with only a minor decline. This was mostly because the dollar weakened during the Asian session and again at the end of the day. As mentioned before, the macroeconomic background, if it influences price, offered no support for the dollar. All U.S. economic reports were either disappointing or weaker than forecast. And when paired with the British pound, the dollar barely rises, regardless of central bank decisions or easing global trade tensions.

Therefore, for GBP/USD, there is little point in considering fundamental or macroeconomic factors, as they currently do not affect the price. Even on the hourly chart, the price continues to move sideways in the medium term. Last Monday, the pair fell sharply on news of a 115% tariff reduction between the U.S. and China, but the dollar quickly gave back all its gains. As we can see, even global trade de-escalation does little to help the dollar.

From a technical perspective, the market is in a pure flat phase. The Ichimoku indicator hasn't been adjusted daily, as doing so has no value in this environment. The Ichimoku is a trend-following indicator and rarely helps during sideways movement. On Friday, the 5-minute chart produced one sell signal near the 1.3328 level (Senkou Span B), and the price gradually fell most of the day, reaching the target at 1.3248 (Kijun-sen). Thus, traders could have opened a short position and earned a decent profit.

COT Report

COT (Commitment of Traders) reports on the British pound show that commercial traders' sentiment has constantly shifted in recent years. The red and blue lines, representing net positions of commercial and non-commercial traders, frequently intersect and often stay close to the zero level. Currently, they are near each other again, indicating a roughly balanced number of long and short positions.

The dollar continues to decline due to Donald Trump's policies, so market makers' interest in the pound is not particularly relevant at the moment. If the global trade war continues to de-escalate, the dollar might have a chance to strengthen, but that chance still needs to be realized.

According to the latest report, the non-commercial group closed 4,800 long contracts and 2,800 short contracts. As a result, the net position of non-commercial traders declined by 2,000 contracts.

There are still no fundamental grounds for long-term purchases of the British pound, and the currency may continue its broader downtrend. The pound has recently risen sharply, mainly due to Trump's political influence. Once that factor fades, the dollar could regain strength. The pound has no independent reason to rise.

GBP/USD 1-Hour Analysis

On the hourly chart, GBP/USD briefly broke out of the sideways channel and started a downtrend—but that movement didn't last long. The pair's future depends entirely on Donald Trump and how the global trade war evolves. If tensions continue to ease and deals are signed, the dollar may resume strengthening. However, the market still doesn't trust the U.S. dollar or Trump, nor does it believe the trade war is truly ending.

For May 19, we highlight the following important levels: 1.2691-1.2701, 1.2796-1.2816, 1.2863, 1.2981-1.2987, 1.3050, 1.3125, 1.3212, 1.3288, 1.3358, 1.3439, 1.3489, 1.3537. Senkou Span B (1.3328) and Kijun-sen (1.3248) lines can also be sources of signals. Setting the Stop Loss level to breakeven when the price passes 20 pips in the right direction is recommended. The lines of the Ichimoku indicator may move during the day, which should be considered when determining trading signals.

No major economic events are scheduled in the UK or the U.S. on Monday, so strong trends or high volatility are unlikely. Of course, Donald Trump could always make unexpected announcements that shock the markets, but his actions are impossible to predict. Regardless, the dollar continues to struggle to grow, even when it has all the reasons to do so.

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.