GBP/USD 5-Minute Analysis

The GBP/USD currency pair also maintained an upward trajectory throughout Monday. The reasons were identical to those for EUR/USD. The dollar had been rising for three weeks on pure trader enthusiasm, as market participants tried hard to ignore the conflict between Powell and Trump, as well as the new tariffs imposed by the U.S. president. We had warned that this was simply a matter of profit-taking on long positions, after which there was a high probability that the upward trend would resume. Of course, anything is possible in the FX market, but everything currently suggests that the dollar is poised to begin a new downward spiral.

Over the weekend, Donald Trump decided to assist the bulls by announcing his intention to raise tariffs on the European Union further. Even before this, the deal with Brussels had been highly uncertain, and now the likelihood of an agreement being signed is nearing zero. Thus, in the coming weeks, we expect a new upward leg for the GBP/USD pair. Yesterday, the price consolidated above the descending channel and now needs to overcome the Senkou Span B line.

On the 5-minute timeframe, two buy signals were generated on Monday. At the very beginning of the European trading session, the price broke through the 1.3420–1.3425 area, and it continued to rise throughout the day. During the U.S. session, the pair broke through the 1.3489 level, which allowed traders to hold long positions. The trade could have been closed above 1.3489 at any point. A profit of at least 60–65 pips was achieved on a day with an empty event calendar.

COT Report

COT reports on the British pound show that over the past few years, the sentiment of commercial traders has changed frequently. The red and blue lines—representing the net positions of commercial and non-commercial traders—cross each other regularly and tend to hover near the zero mark. Currently, they are also located close together, which indicates a roughly equal number of buy and sell positions. However, over the past year and a half, the net position has been growing and in recent months has remained bullish.

The dollar continues to weaken due to Donald Trump's policies; therefore, in principle, market makers' demand for the pound sterling is not particularly significant at present. The trade war, in one form or another, is likely to persist for an extended period, and demand for the dollar is expected to continue declining. According to the latest report on the British pound, the "Non-commercial" group closed 7,000 BUY contracts and 3,000 SELL contracts. As a result, the net position of non-commercial traders declined by 4,000 contracts over the reporting week.

In 2025, the pound has risen sharply—but this is due to one key reason: Trump's policy. Once this factor is neutralized, the dollar may return to growth—but when that will happen, no one knows. The pace of growth in the net position for the pound is not particularly relevant at this time. What matters is that the dollar's net position is declining much faster.

GBP/USD 1-Hour Analysis

On the hourly timeframe, the GBP/USD pair is close to forming a new, local uptrend. Trump's policy remains unchanged—tariffs continue to be introduced, and pressure on Jerome Powell persists. The market already had no real reasons to buy the U.S. dollar—and with each passing week, those reasons become fewer.

For July 22, we highlight the following important levels: 1.3125, 1.3212, 1.3369, 1.3420, 1.3489, 1.3537, 1.3615, 1.3741–1.3763, 1.3833, 1.3886. The Senkou Span B line (1.3529) and the Kijun-sen line (1.3425) may also serve as signal sources. The Stop Loss level is recommended to be moved to breakeven once the price moves 20 pips in the correct direction. Keep in mind that Ichimoku indicator lines may shift during the day—this should be taken into account when identifying trading signals.

No significant events or reports are scheduled in the UK for Tuesday. In the U.S., however, Federal Reserve Chair Jerome Powell is expected to speak. Judging by its headline, this is a fairly significant event—especially on a day with an empty calendar. However, given rising inflation, the Fed's monetary policy is unlikely to change in the near term. Therefore, we do not expect any significant shifts in Powell's rhetoric. But if the Fed chair touches on the conflict with Trump in his remarks, that could be quite interesting.

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.