GBP/USD 5-Minute Analysis

On Wednesday, the GBP/USD currency pair traded very technically, unlike EUR/USD. There were no significant reports yesterday in either the UK or the US; however, Donald Trump raised tariffs on India, effectively sealing the fate of the dollar. However, the American currency didn't just start falling from an arbitrary point—it first corrected to the 1.3420 level and executed an almost perfect technical bounce. After that, we saw only growth from the British pound, which once again became the primary beneficiary of the dollar's failure.

Technically, we still expect an upward move. The correction we've seen in recent days, in our view, was even excessive. But corrections come in all shapes. As we see, the market required news from America to resume the summer sell-off of the dollar. Given the disastrous fundamental background for the US currency on all fronts, we expect further growth in the GBP/USD exchange rate.

On the 5-minute chart yesterday, there were three noteworthy trading signals. Overnight, the price settled below the critical line, allowing traders to open short positions. By the end of the European session, the pair reached the 1.3420 level and formed a buy signal. Thus, traders could close their shorts and open new long positions. A few hours later, the price rose to the Kijun-sen line and steadily overcame it. An hour later, it tested the Senkou Span B line. We believe the upward movement will continue, but long positions could have been closed near Senkou Span B. Thus, two trades could have been opened yesterday—both closed with good profit.

COT Report

COT reports on the British pound show that in recent years, commercial traders' sentiment has been constantly shifting. The red and blue lines, reflecting the net positions of commercial and non-commercial traders, regularly cross and usually stay close to zero. At present, they are again almost at the same level, suggesting roughly equal long and short positions.

The dollar continues to weaken due to Donald Trump's policies, so demand for sterling among market makers is not particularly relevant now. The trade war will continue in one form or another for a long time. The Fed will cut rates at some point in the coming year. Dollar demand will fall regardless. According to the latest COT report on the British pound, the "Non-commercial" group opened 7,500 BUY contracts and closed 6,300 SELL contracts. As a result, the net position of non-commercial traders rose by 13,800 contracts for the reporting week.

In 2025, the pound has risen significantly, but it is important to understand that the reason is singular—Trump's policy. Once that factor fades, the dollar may strengthen, but no one knows when. It does not matter much how the pound's net position changes—dollar positioning is falling anyway, usually at a faster pace.

GBP/USD 1-Hour Analysis

On the hourly timeframe, GBP/USD is poised to form a new uptrend but remains stagnant. The pair has corrected enough in recent weeks to resume the global uptrend that started back in January. The fundamental and macro background hasn't changed, so there's still no reason to expect dollar strength.

For August 28, we highlight the following key levels: 1.3125, 1.3212, 1.3369–1.3377, 1.3420, 1.3509–1.3525, 1.3615, 1.3681, 1.3763, 1.3833, 1.3886. The Senkou Span B (1.3495) and Kijun-sen (1.3466) lines can also serve as signal sources. The Stop Loss level is recommended to be set at breakeven after a 20-pip move in the right direction. The Ichimoku indicator lines may fluctuate throughout the day, so this should be taken into account when identifying trading signals.

On Thursday, there are no macroeconomic reports or events scheduled in the UK, and the US will release the second estimate of Q2 GDP, which is largely irrelevant. We assume the correction is complete, including any internal corrections. Thus, the move north may continue even without informational support.

Trading Recommendations

We believe that on Thursday, the upward movement may continue, but the pound still faces a resistance area at 1.3509–1.3525 above. We are waiting for a breakout of this area, after which we will consider new long positions targeting 1.3615.

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