GBP/USD 5M Analysis

On Wednesday, GBP/USD remained within its descending channel. However, a more interesting setup emerged in the 4-hour time frame, where the price attempted several times to break through the Senkou Span B line—unsuccessfully. This suggests that the Ichimoku indicator is not signaling a downward trend reversal, but rather a correction, which could end as early as today or tomorrow.

Simultaneously, on the hourly time frame, the pair may consolidate above the descending channel, which would also signal the end of the downward correction. This could happen with minimal effort.

In addition, the dollar has been rising over the past week and a half based solely on technical factors. The market appears to be restraining itself from resuming dollar selling for now. Of course, Trump has announced numerous new tariffs, but none have actually been implemented or increased. Still, the market continues to expect the worst and ignores all positive macroeconomic data from the U.S., as was the case last week. So what could help the dollar? The cancellation of Trump's tariffs. And who could do that? No one.

On the 5-minute chart, the pair traded in a tight sideways range between the Senkou Span B line and the 1.3615 level. Even in this lower time frame, the price rebounded four times in one day from the lower boundary of the Ichimoku cloud—each instance serving as a buy signal. Only one of these trades reached the nearest target at 1.3615, but none of the long positions would have resulted in losses. From the 1.3615 level, the price also bounced twice, offering traders two additional short opportunities. In both cases, the price nearly returned to the Senkou Span B line.

COT Report

COT reports for the British pound show that over recent years, the sentiment of commercial traders has been constantly shifting. The red and blue lines, which reflect net positions of commercial and non-commercial traders, frequently cross and generally remain near the zero line. They are currently positioned close together, indicating a roughly equal number of long and short 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 decline due to Donald Trump's policy, so at the moment, demand from market makers for the British pound is of limited importance. The trade war is likely to persist in one form or another for a long time, and demand for the dollar will continue to decline. According to the latest report, the "Non-commercial" group opened 7,300 long and 10,300 short positions on the British pound. As a result, the net position of non-commercial traders decreased by 3,000 over the reporting week—which is largely insignificant.

The pound has seen a significant rally in 2025, but the reason is clear—Trump's policy. Once that factor is neutralized, the dollar may begin to recover. When that might happen, however, is unknown. Trump's presidency has only just begun, and the next four years could bring many more shocks.

GBP/USD 1H Analysis

In the hourly time frame, GBP/USD continues its downward movement, which is a technical correction. Last week, the market ignored all the positive macroeconomic data from the U.S. and failed to break above the Senkou Span B line. Therefore, we believe that the pound's upward movement will resume very soon. A consolidation below the Ichimoku cloud could allow the dollar to strengthen for a bit longer, but even in that case, we would not expect strong growth.

Key Trading Levels for July 10:

1.3212, 1.3288, 1.3358, 1.3439, 1.3489, 1.3537, 1.3615, 1.3741–1.3763, 1.3833, 1.3886 Also relevant: Senkou Span B at 1.3569 and Kijun-sen at 1.3602

Place Stop Loss at breakeven once the price moves 20 points in the right direction. Note that the Ichimoku indicator lines may shift during the day and should be monitored when identifying trading signals.

Thursday Outlook

There are no significant events scheduled in either the UK or the U.S. on Thursday. This week, the dollar has ignored negative fundamentals, but the current movement remains a correction—and it could be completed soon.

Chart Legend:

• Thick red lines – support/resistance levels where price movement may stall; not direct trade signals
• Kijun-sen and Senkou Span B – Ichimoku indicator lines transferred from the 4-hour to the 1-hour chart; considered strong levels
• Thin red lines – previous high/low levels where the price has bounced before; can serve as trade signals
• Yellow lines – trendlines, channels, and other technical patterns
• COT Indicator 1 – net position size for each trader group