GBP/USD 5-Minute Analysis
The GBP/USD currency pair also traded higher on Monday, although it pulled back slightly during the day. This retreat followed the announcement that the increase in tariffs for the European Union had been postponed from June 1 to July 9. However, the market had a minimal negative reaction to the earlier dollar selling on Friday and overnight into Monday. If you look at the hourly chart for GBP/USD, you can see that the sterling continues to rise steadily. An addition of 100 pips in growth doesn't change anything. The 4-hour and daily charts show similar patterns. Therefore, it is evident that the market is not concerned about the recent accumulation of "excess" long positions.
We've said many times that the British pound has been rising in recent years more often than the fundamental and macroeconomic backdrop would suggest. Things in the UK aren't so great as to justify a Bitcoin-style pound rally. But the market continues to price in the "Trump factor" and isn't even considering selling the pair. The current movement doesn't even need to be broken down in detail. Whether the pound corrects by 50 or 100 pips makes almost no difference. Most of the time, it keeps rising.
This upward momentum may continue as long as traders remain uncertain about what to expect from the Federal Reserve, the U.S. economy, and the final tariff decisions. Currently, the market is pricing in the worst-case scenario simply because, under Trump's policies, that's the only scenario it can expect.
The 5-minute chart produced three trading signals on Monday, but most of the movement occurred during the Asian session. The European and U.S. sessions were much quieter. The pair initially broke through the 1.3572 level, then bounced off it from above, and later consolidated below it—by that point, the momentum had already faded. In all three cases, we saw the flat movement that had been expected due to an empty economic calendar.
COT Report
COT reports on the British pound show that commercial trader sentiment has fluctuated constantly in recent years. The red and blue lines, representing the net positions of commercial and non-commercial traders, cross each other frequently and usually hover around the zero mark. They are close together again, indicating a roughly equal number of long and short positions. However, the net position has shown steady growth over the past year and a half.
The dollar continues to weaken due to Donald Trump's policies, so market makers' demand for the pound is not particularly important now. If a global trade war de-escalation resumes, the U.S. dollar may have an opportunity to strengthen — but that opportunity still needs to be seized.
According to the latest report on the British pound, the "Non-commercial" group closed 1,400 long contracts and opened 1,800 short contracts, resulting in a 3,200 decrease in the net long position.
The pound has surged significantly recently, but it's important to understand that the only reason is Trump's policy. Once that factor is neutralized, the dollar may begin to rise again. The pound itself has no intrinsic growth drivers. Nevertheless, the "Trump factor" is enough for traders to base decisions on now.
GBP/USD 1-Hour Analysis
On the hourly timeframe, the GBP/USD pair continues to move upward, currently supported by a price channel. The pair's future movement depends entirely on Donald Trump and developments in the global trade war. However, we can also say that it depends on the market's overall sentiment toward America and Trump personally. At this point, that sentiment remains strongly negative. The dollar keeps falling, and when tariff news hits, it falls even harder.
For May 27, we highlight the following key levels: 1.2863, 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 (1.3269) and the Kijun-sen line (1.3463) can also serve as signal levels. It is recommended to place a Stop Loss at breakeven once the price has moved 20 pips in the right direction. Ichimoku indicator lines may shift during the day and should be considered when identifying signals.
No significant events are scheduled in the UK for Tuesday. In the U.S., a report on durable goods orders will be released—it may be the "silver lining in a dark cloud" for the dollar, potentially causing a slight downward correction in the pair.
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.
