GBP/USD 5-Minute Analysis

The GBP/USD currency pair traded more calmly on Monday. The European trading session passed entirely in a flat range, but during the U.S. session, the euro pulled the pound downward with it. We had warned that the technical correction on the daily timeframe might easily continue, but on Monday, Von der Leyen surprised the dollar by signing a deal with Donald Trump — a deal that has already been criticized across the European Union. The euro and the pound often show a strong correlation, so it's no surprise that the British pound also ended up declining.

Thus, on the daily timeframe, the correction continues; however, for it to be considered a proper downtrend, the dollar needs new reasons to sustain its growth. The price may continue to fall for several consecutive days solely due to the EU–U.S. trade deal, but this week also brings several important U.S. events and data releases. So if the dollar wants more than a one-day rally, it needs support from key macroeconomic data and the Federal Reserve. The move has begun — now it needs new catalysts to keep traders buying the dollar, which they had been panic-selling for the past six months.

Trading signals on the 5-minute timeframe for the pound were much weaker than for the euro, due to the flat range during the European session. Several false signals were formed around the 1.3420 level. These losses could have been avoided by recognizing the flat conditions in time (since the euro was confidently declining at that point). However, in that case, it would also have been difficult to act on the valid sell signal that came during the U.S. session.

COT Report

COT reports for the British pound show that commercial trader sentiment has constantly shifted over recent years. The red and blue lines — representing net positions of commercial and non-commercial traders — frequently cross and generally stay near the zero mark. Once again, they've practically merged, indicating an almost equal number of buy and sell positions.

The dollar continues to weaken due to Donald Trump's policies, so demand from market makers for the British pound is currently of little importance. The trade war is likely to persist in one form or another for an extended period, resulting in a sustained decline in demand for the dollar. According to the latest report on the British pound, the "Non-commercial" group closed 7,000 BUY contracts and opened 21,400 SELL contracts. As a result, the net position of non-commercial traders fell by 29,400 contracts over the reporting week.

In 2025, the pound has risen significantly, but the reason is singular: the policies of Trump. Once that factor is neutralized, the dollar may begin to rise again, but no one knows when that will happen. It doesn't matter how quickly the pound's net position is growing — the dollar's is typically declining at a faster rate.

GBP/USD 1-Hour Analysis

On the hourly timeframe, the GBP/USD pair is not yet ready for a new uptrend. The price easily broke through the Ichimoku indicator lines, meaning the trend has turned downward again. We still do not believe that the dollar will grow strongly or for a long time. Traders don't need to worry about our concerns; they can continue trading based on technical levels, keeping in mind that reasons for local growth appeared on Monday, but long-term reasons are still lacking.

For July 29, we highlight the following important levels: 1.3125, 1.3212, 1.3369, 1.3420, 1.3509, 1.3615, 1.3681, 1.3763, 1.3833, 1.3886. The Senkou Span B (1.3490) and Kijun-sen (1.3492) lines can also serve as signal sources. It's recommended to move the Stop Loss to breakeven once the price moves 20 pips in the correct direction. Ichimoku lines may shift throughout the day and should be considered when identifying trade signals.

On Tuesday, the UK calendar is empty, while in the U.S., one report will be released — JOLTs job openings. If Trump doesn't stir the markets with fresh, high-impact statements about trade deals and tariffs, traders are likely to remain calm on Tuesday.

Trading Recommendations

We believe that on Tuesday, the 1.3369 level will be the key focus for trading. A break below this level will confirm the bears' intention to continue selling for a while. Conversely, a rebound from this level may signal the end of the correction on the daily timeframe and open the door for long positions targeting 1.3420 and 1.3490.

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.