GBP/USD 5-Minute Analysis
On Friday, the GBP/USD currency pair saw only a slight correction after its strong rally. Once again, we observe a market with no apparent desire to take profits from long positions or open short ones. This suggests that the dollar still has little chance of strengthening, even modestly. A couple of months ago, there were still some reasons for dollar growth, but with each passing week, those reasons are dwindling. The market no longer expects a peaceful resolution to trade tensions but rather a sharp Federal Reserve rate cut and a recession in the U.S. economy. The first trade deals announced by Donald Trump suggest only one thing — tariffs in one form or another will remain. That is, there's no hope that tariffs will be removed during negotiations. Trump's trade deals assume the same tariffs on imports as if there were no deals. "Damned if you do, damned if you don't."
As such, the U.S. currency may continue to decline for a long time. Jerome Powell, one suspects, would already like to leave his post as soon as possible, while Trump openly states that the new Fed Chair will be someone willing to cut rates to 1–2%. And it's not just about interest rates. Essentially, Trump wants someone who will follow his orders. If, in a couple of years, the key rate needs to be made negative, the new Fed chief will be expected to do just that. In short, it's surrealism in all its glory.
On Friday, two sell signals were formed in the 5-minute timeframe, and volatility was low. The price bounced twice from the 1.3741 level, which was complemented by the 1.3763 level by the end of the day. The first time, the price failed to move even 20 points down, but the second time, there was a decent drop of 20–30 points, offering a chance for some profit.
COT Report
COT reports for the British pound indicate that commercial traders' sentiment has shifted constantly over the past few years. The red and blue lines, representing the net positions of commercial and non-commercial traders, frequently cross and typically remain near the zero line. Currently, they are also close to each other, indicating a roughly equal number of buy and sell positions. However, over the past year and a half, the net position has been increasing.
The dollar continues to weaken due to Trump's policies, making sterling demand among market makers less relevant at the moment. The trade war will continue in some form, and the Fed's key interest rate may drop significantly in the coming years — more than the economic outlook justifies. Thus, demand for the dollar will fall regardless. According to the latest COT report on the pound, the "Non-commercial" group closed 6,400 buy contracts and 2,000 sell contracts. This means the net position shrank by 8,400 contracts, but this carries virtually no significance.
In 2025, the pound has seen a sharp increase, but there's one main reason — Trump's policies. Once this factor fades, the dollar could start recovering. But when that happens, it is anyone's guess. Trump is only at the beginning of his presidency, and the next four years may bring many more shocks.
GBP/USD 1-Hour Analysis
On the hourly timeframe, GBP/USD continues its northward march. For a few days, the market remained stagnant as it awaited new negative or sensational news from the U.S. It then resumed buying the pound and selling the dollar. As we can see, no news at all is sometimes enough for the dollar to fall. And at this point, almost any U.S. news is a reason to sell the dollar. The price might consolidate for a couple more days and then resume its upward move.
Key Levels for June 30: 1.3212, 1.3288, 1.3358, 1.3439, 1.3489, 1.3537, 1.3615, 1.3741–1.3763, 1.3833, 1.3886. Also relevant are the Senkou Span B line (1.3508) and the Kijun-sen line (1.3640). A Stop Loss should be set to breakeven after the price moves 20 points in the desired direction. The Ichimoku indicator lines may shift throughout the day, which should be taken into account when identifying trade signals.
On Monday, the UK will publish the final estimate of Q1 GDP. A strong deviation from the second estimate is not expected, meaning the market will have no compelling reason to sell the pound sterling.
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.
