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The GBP/USD currency pair traded sideways for almost the entire day yesterday. As expected, it was a "quiet Monday." The price made only a minimal correction toward the Senkou Span B line but failed to consolidate below it. Of course, if today's U.S. durable goods orders report turns out strong, the dollar may find support for additional growth. However, traders likely understand that Friday's dollar drop, based on somewhat questionable factors, was not accidental. The probability of a Federal Reserve rate cut in September was already high before Powell's speech – around 90%. It remains at 90%. In other words, nothing has changed in market expectations, but the dollar still fell by more than 100 pips.
From a technical perspective, the pair broke through the descending trendline, meaning we are now dealing with a new upward trend. To form a new ascending trendline, a second extremum point is needed. For now, the Ichimoku indicator lines can serve as support for the new trend. As long as the price stays above them, the upward bias remains.
On the 5-minute TF, several trading signals were generated around the 1.3509 level on Monday, but the first two were false, making it pointless to consider the rest. Volatility was low, and the pair reluctantly corrected after Friday's surge. In both cases, the price failed to move 20 pips in the right direction. By the end of the day, we supplemented level 1.3509 with 1.3525, turning it into a resistance area. Now the price is trapped between the Ichimoku indicator lines and this resistance zone. A breakout is needed.
COT reports on the British pound show that in recent years, commercial traders' sentiment has been constantly shifting. The red and blue lines, reflecting the net positions of commercial and non-commercial traders, regularly cross and usually stay close to zero. At present, they are again almost at the same level, suggesting roughly equal long and short positions.
The dollar continues to weaken due to Donald Trump's policies, so demand for sterling among market makers is not particularly relevant now. The trade war will continue in one form or another for a long time. The Fed will cut rates at some point in the coming year. Dollar demand will fall regardless. According to the latest COT report on the British pound, the "Non-commercial" group opened 7,500 BUY contracts and closed 6,300 SELL contracts. As a result, the net position of non-commercial traders rose by 13,800 contracts for the reporting week.
In 2025, the pound has risen significantly, but it is important to understand that the reason is singular—Trump's policy. Once that factor fades, the dollar may strengthen, but no one knows when. It does not matter much how the pound's net position changes—dollar positioning is falling anyway, usually at a faster pace.
In the hourly timeframe, GBP/USD is poised to form a new upward trend. The pair corrected sufficiently over the past week to resume the global uptrend that started back in January. The fundamental and macroeconomic backdrop has not changed, leaving no grounds to expect dollar strength.
For August 26, we highlight the following important levels: 1.3125, 1.3212, 1.3369–1.3377, 1.3420, 1.3509–1.3525, 1.3615, 1.3681, 1.3763, 1.3833, 1.3886. The Senkou Span B (1.3495) and Kijun-sen (1.3466) lines can also generate signals. A Stop Loss level is recommended at breakeven once the price moves 20 pips in the right direction. Keep in mind that Ichimoku lines can shift during the day, which must be considered when identifying signals.
On Tuesday, no macroeconomic reports or events are scheduled in the U.K. However, the U.S. will release a fairly significant durable goods orders report, which could trigger a market reaction if the result is significantly different from expectations. Volatility may be slightly higher than on Monday.
We believe the upward move may resume on Tuesday. However, the pound now faces resistance at 1.3509–1.3525 above and Ichimoku lines below. A breakout above the resistance zone would open the way for new long positions targeting 1.3615.
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