13.05.202604:25 Forex Analysis & Reviews: Intraday Analysis of GBP/USD on May 13. ICT Trading System. The Pound is on the Brink of Collapse

GBP/USD 5M Analysis

The GBP/USD currency pair declined sharply on Tuesday, following a decline the day before. As noted yesterday, it became known about another violation of the ceasefire between Iran and the US, as well as another failure in negotiations. Additionally, Keir Starmer's party suffered a crushing defeat in local elections, and another political crisis seems to be brewing in Britain, with yet another Prime Minister preparing to resign. Last night, Donald Trump mentioned the possibility that the deal with Iran could fall through, adding to the uncertainty. US inflation surged to 3.8% in April, slightly increasing the likelihood of at least one Federal Reserve interest rate hike this year. All of these events favored the US dollar, driving the GBP/USD pair down by 120 pips. One could say that the British pound got off lightly.

On the hourly timeframe, the upward trend has been formally invalidated as the price consolidated below the Senkou Span B line. However, the movements of recent weeks resemble a flat structure, so we wouldn't make sudden conclusions above the 1.3465-1.3480 area. The pound has fallen for two consecutive days, but there is no basis for a long-term decline. If the flat structure is indeed present, the British currency could return to 1.3645 this week.

On the 5-minute timeframe, three trading signals for selling were formed on Tuesday. Early in the European trading session, the price breached the critical line, enabling short positions to be opened. The pair then crossed below the Senkou Span B line and later bounced off it, allowing traders to maintain their short positions. By evening, the trades could have been closed for a profit of about 50 pips.

GBP/USD 4H Analysis

On the 4-hour timeframe, we analyze according to the ICT trading system. The exchange rate of the British pound correlates closely with the euro, similar to the relationship between Ethereum and Bitcoin. Therefore, patterns and signals from EUR/USD should always be considered. The trend on the 4-hour timeframe is also upward, with the CHOCH line passing through the 1.3511 level; only below this level can we say the upward momentum is exhausted. Until this time, we will only look for buy signals. It should be noted that there is a probability of a flat structure with possible boundaries at 1.3511 and 1.3656. If this is the case, a deviation around the 1.3511 level could form, sending the pound back up. We do not yet consider the upward trend to be broken; the likelihood of new growth in the pair on the 4-hour timeframe remains quite high. Therefore, we are not considering the last bearish FVG. If the upward trend is indeed broken, then patterns such as Order Blocks and FVG will come into play, from which short positions could be considered.

GBP/USD 1H Analysis

On the hourly timeframe, the GBP/USD pair continues to form an upward trend, which could be invalidated if the British pound consolidates below the Ichimoku indicator lines. The influence of geopolitics continues to wane; the market no longer pays close attention to all news from the Middle East, and the dollar has lost its only significant support.

For May 13, we highlight the following important levels: 1.3096-1.3115, 1.3179-1.3187, 1.3369-1.3377, 1.3465-1.3480, 1.3588, 1.3671-1.3681, and 1.3751-1.3763. The Senkou Span B line (1.3550) and Kijun-sen line (1.3577) may also be sources of signals. It is recommended to set a Stop Loss at break-even once the price moves 20 pips in the correct direction. The Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals.

On Wednesday, no significant events are scheduled for the UK, while the US will release the Producer Price Index, which is certainly less important than yesterday's inflation report, which the market ignored.

Trading Recommendations:

Today, traders may consider short positions if the price consolidates below the 1.3465-1.3480 area, targeting the 1.3377 level. Long positions can be opened on a bounce from the 1.3465-1.3480 area, targeting the Ichimoku indicator lines. On the 4-hour timeframe, long positions can be held if a deviation, as previously mentioned, forms.

Explanations for the Illustrations:

• Support and Resistance Levels – Thick red lines at which market movement may end. These are not sources of trading signals.
• Kijun-sen and Senkou Span B Lines – Lines from the Ichimoku indicator transferred from the 4-hour timeframe to the hourly timeframe. These are considered strong lines.
• Extreme Levels – Thin red lines from which the price has previously bounced. These are sources of trading signals.
• Yellow Lines – Trend lines, trending channels, and any other technical patterns.
• CHOCH – Change of the trend structure.
• Liquidity – Liquidity, Stop Loss, and pending orders that market makers use to build their positions.
• FVG – Fair Value Gap. The price rapidly passes through such areas, indicating a complete absence of one party in the market. Subsequently, the price tends to return and react to these areas in alignment with the main trend.
• IFVG – Inverted Fair Value Gap. After returning to such an area, the price does not react from it; instead, it impulsively breaks through and then tests it from the other side.
• OB – Order Block. The candle on which the market maker opened a position aimed at capturing liquidity to form their position in the opposite direction.