GBP/USD 5-Minute Analysis

On Wednesday, the GBP/USD currency pair resumed its downward movement, though there was no real reason for it. There were no major events in the UK or the US during the day, but the decline of the British currency continued nonetheless. Last week's drop in the pound could perhaps be explained, but this week's decline... we think the current move lacks logic.

On the daily timeframe, however, it's easy to see that price may have entered a flat (sideways) phase. Traders are not yet ready for renewed, sustained buying of the pound against the dollar, so the price is moving between the 1.3150 and 1.3780 levels. If the pair is now in a sideways channel, then there's no real need for specific reasons for movement in either direction. Prices can fluctuate without much justification. The good news is that a flat on the daily timeframe often turns into a series of trends on the hourly timeframe. More generally, we still do not expect strong gains from the dollar, but sideways markets are always frustrating for traders—they're hard to identify in time and not always comfortable to trade. You can now draw a trendline on the hourly chart, but it doesn't look convincing. The pound's movements in recent days have been quite disappointing.

As for trading signals on the 5-minute chart, only the break below the Senkou Span B line is noteworthy, which happened almost at the very end of the move down. However, the day before, the price rebounded off the 1.3533 level, so traders had reasons to enter short positions as early as Tuesday.

COT Report

COT reports for the pound show that commercial traders' sentiment has been shifting constantly in recent years. The red and blue lines, reflecting the net positions of commercial and non-commercial traders, frequently cross and usually hover close to zero. Right now, they're nearly at the same level, meaning the number of buy and sell positions is roughly equal.

The dollar continues to fall due to Donald Trump's policies, so at this point, market maker demand for the pound is not very significant. The trade war will likely persist in one form or another for a considerable time to come. The Fed will lower rates in the coming year regardless. Dollar demand will inevitably decline. According to the latest report on the pound, the "Non-commercial" group added 5,900 new BUY contracts and closed 21,100 SELL contracts. As a result, the net position of non-commercial traders rose by 27,000 contracts over the week.

In 2025, the pound has made significant gains, but the reason is clear: Donald Trump's policies. Once this fundamental driver fades, the dollar may start to strengthen again, but no one knows when that will be. The net position for the pound doesn't matter much; for the dollar, it keeps dropping, and generally at a faster rate.

GBP/USD 1-Hour Analysis

On the hourly chart, GBP/USD pulled back last week due to negative fundamentals, and this week continues to fall. It's safe to say a new downtrend has begun. The Senkou Span B line is keeping the pound in play, but breaking below it will open the way for further declines. There are still no major reasons for the dollar to strengthen overall, so we expect the 2025 uptrend to resume eventually. However, the local trend remains down for now.

For September 25, we highlight the following important levels: 1.3125, 1.3212, 1.3369–1.3377, 1.3420, 1.3533–1.3548, 1.3584, 1.3681, 1.3763, 1.3833, 1.3886. The Senkou Span B line (1.3587) and the Kijun-sen line (1.3541) can also serve as signal triggers. A Stop Loss should be set to break even if the price moves 20 pips in your favor. Note that Ichimoku lines can fluctuate throughout the day, so keep this in mind when evaluating trading signals.

There are no events on the UK calendar for Thursday, but the US will be releasing important data on durable goods orders and the third estimate of Q2 GDP. The market reaction could follow these reports.

Trading Recommendations

Today, traders can expect further declines, as the downtrend is currently obvious. Price has bounced off the 1.3533–1.3548 area and broken through the Senkou Span B line. The next downside targets are 1.3420 and 1.3377, which can be considered until new buy signals form.

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.