GBP/USD 5-Minute Analysis
On Monday, the GBP/USD currency pair predictably failed to continue its downward movement. Recall that earlier, the price again formed a signal for a trend reversal to bearish—a consolidation below the ascending trendline. And even earlier—another signal—an exit from the ascending channel. As of now, none of these signals has led to a decline in the pair. Thus, the market still isn't rushing to buy the US dollar.
The British pound continues to take advantage of the current situation. Let us remind you that there are no actual reasons for the British currency to rise now. Unlike the Federal Reserve, the Bank of England continues to lower the interest rate, and the UK economy is not demonstrating strong growth rates. However, the "Trump factor" alone has been enough for the market to keep dumping the US dollar for four months straight. On Monday, there were no important news releases in the US or the UK, aside from more reports of mass unrest in the US and the "Donald Trump – Elon Musk" standoff. That said, this news was already known over the weekend.
On the 5-minute TF, we didn't see any interesting moves on Monday. The GBP/USD pair showed movements identical to the EUR/USD pair and formed identical trading signals. Thus, breaking through the 1.3537–1.3551 area was a buy signal but did not lead to a significant upward move. Later, the price consolidated below this area, but we didn't see a substantial drop either. The market chose to ignore the events related to Musk and Trump and the unrest in the US while still seeing no reason to buy the dollar.
COT Report
The COT reports for the British pound show that commercial traders' sentiment has constantly changed in recent years. The red and blue lines, representing the net positions of commercial and non-commercial traders, constantly cross and are usually near the zero mark. They are currently close to each other, indicating a roughly equal number of buy and sell positions. However, the net position has been increasing over the last year and a half.
The dollar continues to fall due to Donald Trump's policies, so market makers' demand for the pound sterling is not very important at the moment. If de-escalation of the global trade war resumes, the U.S. dollar will have a chance for some strengthening. According to the latest COT report on the pound, the "Non-commercial" group opened 1,300 BUY contracts and 1,400 SELL contracts. Thus, the net position of non-commercial traders barely changed for the reporting week.
Recently, the pound has risen significantly, but it's important to note that there's only one reason: Trump's policy. Once that factor is neutralized, the dollar could rise, but no one knows when that will happen. The pound itself has no fundamental reasons for growth. Nevertheless, traders are more than satisfied with the "Trump factor" when making trading decisions.
GBP/USD 1-Hour Analysis
In the hourly timeframe, the GBP/USD pair maintains an uptrend despite consolidation below the ascending channel and the ascending trendline. The pair's further movement entirely depends on Trump and the development of the global trade war situation rather than on technical analysis. The overall market sentiment toward the US and its president's policies remains sharply negative, making it extremely difficult for the dollar to count on any strong growth. Moreover, Trump regularly disappoints the market with new measures, tariffs, and scandals, and the macroeconomic data from overseas more often disappoints than pleases.
For June 10, we highlight the following important levels: 1.2981–1.2987, 1.3050, 1.3125, 1.3212, 1.3288, 1.3358, 1.3439, 1.3489, 1.3537, 1.3637–1.3667, 1.3741. The Senkou Span B line (1.3489) and the Kijun-sen line (1.3551) may also act as signal sources. Setting the Stop Loss level to breakeven when the price moves 20 pips in the correct direction is recommended. The Ichimoku indicator lines may shift throughout the day and should be considered when identifying trading signals.
On Tuesday, the UK is scheduled to publish data on the unemployment rate, changes in unemployment claims, and wages. These are fairly interesting figures, but we don't believe they can reverse the trend. All the dollar can still count on is a correction. We recommend closely following developments related to the trade war and the mass unrest in the US, as they may trigger another collapse in the US dollar.
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.
