GBP/USD 5-Minute Analysis

On Tuesday, the GBP/USD currency pair also continued its upward movement. While the new decline of the U.S. dollar could be attributed to Jerome Powell's speech—as the only major event of the day—we believe this explanation isn't even necessary. As early as yesterday, we warned that a renewed dollar drop was the most logical scenario. Both major currency pairs broke above their descending channels after a three-week downtrend, and during that period, there were numerous fundamental reasons for the dollar to weaken. The fact that the market had been ignoring them suggested that it would inevitably price them in later. Now that the technical correction is over, the dollar is resuming its decline.

How can the dollar possibly grow under current conditions, when over the past two to three weeks, Donald Trump has raised tariffs on 24 countries, announced new duties on copper and pharmaceuticals starting August 1, and hasn't signed a single trade deal? How can one expect dollar appreciation when the war with Jerome Powell—which could result in a total loss of trust in the Federal Reserve—is only intensifying? How can the dollar grow if, just earlier this week, Trump decided to raise tariffs on EU goods? In our view, the six-month uptrend remains intact and shows no signs of abating soon.

Unfortunately, yesterday's trading signals left much to be desired, as the new leg of the uptrend only began during the U.S. trading session—and even then, not immediately. Once again, we're seeing price action where the pair remains flat for 20 hours and then surges in just 4 hours. Levels 1.3489 and 1.3537 have been removed, and level 1.3508 has been added.

COT Report

COT reports on the British pound show that over the past few years, the sentiment of commercial traders has changed frequently. The red and blue lines—representing the net positions of commercial and non-commercial traders—cross each other regularly and tend to hover near the zero mark. Currently, they are also located close together, which indicates a roughly equal number of buy and sell 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 weaken due to Donald Trump's policies; therefore, in principle, market makers' demand for the pound sterling is not particularly significant at present. The trade war, in one form or another, is likely to persist for an extended period, and demand for the dollar is expected to continue declining. According to the latest report on the British pound, the "Non-commercial" group closed 7,000 BUY contracts and 3,000 SELL contracts. As a result, the net position of non-commercial traders declined by 4,000 contracts over the reporting week.

In 2025, the pound has risen sharply—but this is due to one key reason: Trump's policy. Once this factor is neutralized, the dollar may return to growth—but when that will happen, no one knows. The pace of growth in the net position for the pound is not particularly relevant at this time. What matters is that the dollar's net position is declining much faster.

GBP/USD 1-Hour Analysis

On the hourly timeframe, the GBP/USD pair has begun forming a new local uptrend, which will likely become part of the broader upward trend. Trump's policy remains unchanged, tariffs continue to be imposed, and pressure on Powell persists. The market previously had no reason to buy the U.S. dollar—and with each passing week, those reasons are growing even fewer.

For July 23, we highlight the following important trading levels: 1.3125, 1.3212, 1.3369, 1.3420, 1.3508, 1.3615, 1.3741–1.3763, 1.3833, 1.3886. The Senkou Span B line (1.3529) and the Kijun-sen line (1.3447) may also serve as sources of signals. The Stop Loss level is recommended to be moved to breakeven once the price moves 20 pips in the favorable direction. Note that Ichimoku indicator lines may shift during the day, so this should be taken into account when identifying trading signals.

No significant events are scheduled in the UK or U.S. for Wednesday, but the pair may continue rising, as the dollar does not currently need weak U.S. macro data or strong UK data to keep falling. The fundamental backdrop is more than sufficient for the dollar to continue its decline for quite some time.

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.