Analysis GBP/USD 5M

The GBP/USD currency pair changed direction again on Tuesday, trading lower. Overall, what is happening with the British pound can be described as a "roller-coaster", "seesaw", or "staggering about". The British currency changes direction every 1–2 days, and most moves are roughly equal in size. On Monday, sterling rose on news of a criminal investigation into Jerome Powell, and on Tuesday, it fell on an entirely neutral US consumer price index. To understand what is happening, one must return to the daily TF. There we see the price has broken through the Ichimoku cloud and the critical line, so the probability of continued rises is high. It's just that the market is not yet ready for such a development. We will not say that a new decline is impossible, but in our view, that option is not logical.

On the hourly TF, to buy the pound, one should wait for a break above the Senkou Span B line. Yesterday, the pair actually bounced off that important line. However, the drop in quotes may be very short-lived, and a clear trend is largely absent now. Every day brings news that is hard to interpret. Even yesterday's inflation report was ambiguous.

On the 5-minute TF, the GBP/USD pair, like EUR/USD, traded with minimal volatility and essentially sideways for most of Tuesday. Only in the US session did it manage to detach from the Ichimoku indicator lines area, thereby forming a sell signal. The nearest target was only 17 pips away and, of course, was reached. After that, the decline in quotes effectively stopped.

COT Report

COT reports on the British pound show that commercial traders' sentiment has constantly changed in recent years. The red and blue lines representing net positions of commercial and non-commercial traders repeatedly cross and are usually near zero. At present, the lines are diverging, but non-commercial traders now dominate with... sales. Speculators are increasingly selling the pound, but as we have already said, it does not matter how low demand for the British currency is — demand for the US dollar is often even lower.

The dollar continues to fall due to Donald Trump's policies, as shown clearly in the weekly TF (illustration above). The trade war will continue in one form or another for a long time, and the Fed will, in any case, cut rates within the next 12 months. Demand for the dollar will decline one way or another. According to the latest COT report (as of January 6) on the British pound, the "Non-commercial" group opened 700 BUY contracts and 4,300 SELL contracts. Thus, the net position of non-commercial traders increased over the week by 2,700 contracts.

In 2025, the pound rose quite strongly, but the reason is one: Donald Trump's policy. Once that reason is neutralized, the dollar may return to growth, but nobody knows when.

Analysis GBP/USD 1H

On the hourly timeframe, the GBP/USD pair continues forming an uptrend despite the breach of the trendline. We believe that the pound's mid-term rise will continue regardless of the local macroeconomic and fundamental background. At present, the euro, which has been falling for three weeks, can pull the pound down. Also, the pound failed to overcome the Senkou Span B line.

For January 14, we highlight the following important levels: 1.3042–1.3050, 1.3096–1.3115, 1.3201–1.3212, 1.3307, 1.3369–1.3377, 1.3437, 1.3533–1.3548, 1.3615, 1.3681, 1.3763. The Senkou Span B (1.3483) and Kijun-sen (1.3447) lines can also be sources of signals. It is recommended to move the stop loss to breakeven after the price moves 20 pips in the favorable direction. Ichimoku indicator lines may shift during the day, which should be taken into account when determining trading signals.

On Wednesday, no major reports or events are scheduled in the UK, while the US will release retail sales and producer price reports. These data have a very low probability of provoking market movement. Trump has a much higher chance.

Trading recommendations:

Today, traders may remain in short positions, as the price has bounced off the Senkou Span B and Kijun-sen areas. Target — the 1.3369–1.3377 area. Long positions will become relevant if the price consolidates above the Senkou Span B line with a target of the 1.3533–1.3548 area.

Explanations of the illustrations:

• Price support and resistance levels (resistance/support) — thick red lines near which movement may end. They are not sources of trading signals.
• Kijun-sen and Senkou Span B lines — Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour. They are strong lines.
• Extremum levels — thin red lines from which the price previously bounced. They are sources of trading signals.
• Yellow lines — trend lines, trend channels, and any other technical patterns.
• Indicator 1 on the COT charts — the size of the net position of each trader category.