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The GBP/USD pair was also biased lower on Monday but once again held above the 1.3179–1.3187 area. Thus, it's possible the pound has found a "bottom" and over the past week has been trading more sideways than falling. We believe the pound's collapse should have stopped long ago, since a weekly-timeframe flat persists and price is currently near the lower boundary of the 1.3150–1.3780 sideways channel. Therefore, the probability of an upward reversal is high, even without local, weighty reasons for it. Recall that a flat produces random moves. So another dip in the pound does not surprise us — over the year of the flat we have repeatedly seen similar moves. As for fundamentals and macro data, the market keeps ignoring them. Yesterday, the US ISM services PMI came in below forecasts, but the dollar did not fall on that report. The trendline remains relevant, but because the pair is flat on the hourly timeframe right now, that trendline has little meaning. The key level today is the support area 1.3179–1.3187.
Technically, the pound continues to form a downward trend, as shown by the trendline and price below the Ichimoku indicator lines. Under current circumstances, GBP can at most expect a correction within the downtrend. If a second full-scale war in the Middle East begins, the pound could resume falling.
On the 5-minute TF on Monday, two decent buy signals formed. Price bounced twice from the 1.3179–1.3187 support area, allowing traders to open straightforward long positions. In both cases, price did not reach the nearest target area, but moved about 40 and 20 pips in the desired direction.
COT reports for the pound show that non-commercial traders have dominated the market with selling for several months. The net position is negative despite the long-term uptrend remaining intact. Given events in the Middle East, it is unsurprising that dollar demand remains high in 2026. The war between the US and Iran formally ended, but a new war inside Yemen has begun. The Federal Reserve's changed stance on monetary policy also supported the dollar, and the uptrend line was breached. However, it was breached under flat conditions, so we do not believe the uptrend is over.
In the long term, the dollar continues to decline due to Donald Trump's policies, which is clearly visible on the weekly TF. The trade war will continue in one form or another for a long time, and Trump's policy is aimed directly and indirectly at weakening the US currency. The long-term uptrend remains. According to the latest COT report (dated September 29), the "Non-commercial" group closed 13,100 BUY contracts and 4,500 SELL contracts. Thus, the non-commercial traders' net position decreased by 8,600 contracts over the week.
On the hourly timeframe, the GBP/USD pair continues to form a downward trend. The Federal Reserve's decision and stance have greatly changed the outlook for the US dollar and the market's attitude toward it. We would say that twice this year a "black swan" has arrived in the market and supported the dollar when no one expected it. Now a third "black swan" — in the form of the war in Yemen — may arrive and again trigger a powerful dollar rally.
For October 6 we highlight the following important levels: 1.3042–1.3050, 1.3096–1.3115, 1.3179–1.3187, 1.3248, 1.3301–1.3309, 1.3369–1.3377, 1.3465–1.3480, 1.3588, 1.3671–1.3681. The Senkou Span B (1.3301) and Kijun-sen (1.3245) lines can also be sources of signals. It is recommended to move the stop loss to breakeven when the price has moved 20 pips in the correct direction. The Ichimoku indicator lines may shift during the day, so factor this in when determining trading signals.
No important publications or events are scheduled today in the UK, while the US will release the secondary ADP report. As a result, the pound may remain rangebound today, and volatility could be low.
Traders can consider the 1.3096–1.3115 area as a target for short positions if the price consolidates below 1.3179–1.3187. A rebound from 1.3179–1.3187 would make 1.3245 and 1.3301 targets for long positions.
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