Analysis of GBP/USD 5M

The GBP/USD currency pair also demonstrated quite a strong upward movement on Monday, for which there were objectively no local reasons. While the rise of the euro could be somewhat associated with Christine Lagarde's speech, the British pound had no news, events, or reports at its disposal. Nevertheless, the pound continued to rise and broke through three significant resistance levels during the day: the Senkou Span B line, the Kijun-sen line, and the trend line. Thus, the downward trend on the hourly timeframe is officially over. By the end of Monday, the price had reached the area of 1.3671-1.3681, but there should be no problems with overcoming this level.

Recall that last week, the Bank of England made a neutral decision to maintain the key interest rate at its previous level; however, due to a greater number of votes among the Monetary Policy Committee officials in favor of lowering the rate, the market interpreted this event as "dovish." We warned that believing in the dollar's rise was not prudent. From a technical standpoint, it was justified, but not from a fundamental one. As we can see, the British currency has been rising for the second consecutive day with no apparent reason. This movement is fully consistent with the overall upward trend on the daily timeframe.

On the 5-minute chart, four trading signals were generated yesterday. Initially, the pair bounced off the 1.3615-1.3633 area, but the sell signal proved false. The price then broke through this area, bounced off it from above, and reached the nearest target area of 1.3671-1.3681. Thus, the buy trade yielded profits. We now expect the area between 1.3671 and 1.3681 to be surpassed, which will allow traders to open new long positions.

COT Report

COT reports for the British pound show that commercial traders' sentiment has been changing steadily in recent years. The red and blue lines representing net positions of commercial and non-commercial traders frequently cross each other and are mostly near the zero mark. Currently, the lines are converging, with non-commercial traders still dominating... sales. Recently, speculators have been actively increasing long positions, so a change in sentiment is possible soon, although it particularly affects the GBP/USD pair.

The dollar continues to decline due to Donald Trump's policies, as shown on the weekly timeframe. The trade war will continue in one form or another for a long time, and the Fed will reduce rates in any case over the next 12 months. Demand for the dollar will diminish regardless. According to the latest COT report (from February 3) for the British pound, the "Non-commercial" group opened 7,100 BUY contracts and 4,800 SELL contracts. Thus, the net position of non-commercial traders increased by 2,300 contracts over the week.

In 2025, the pound rose significantly, but it should be understood that there is only one reason: Donald Trump's policies. Once this reason is mitigated, the dollar may start to rise. But when that will happen is unknown.

Analysis of GBP/USD 1H

On the hourly timeframe, the GBP/USD pair has broken the downward trend; therefore, we can now expect short-term growth. We still believe that, in the medium term, the British pound will rise amid a declining American currency. Therefore, local upward trends take higher priority than downward ones.

For February 10, we identify the following important levels: 1.3201-1.3212, 1.3307, 1.3369-1.3377, 1.3437, 1.3533-1.3548, 1.3615, 1.3671-1.3681, 1.3751-1.3763, 1.3846-1.3886, 1.3948. The Senkou Span B line (1.3633) and the Kijun-sen line (1.3619) may also provide signals. It is recommended to set the Stop Loss level to breakeven when the price moves in the right direction by 20 pips. The Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals.

On Tuesday, no significant events are scheduled in the UK, while the US will publish a somewhat significant retail sales report. However, Monday showed that the market is set for the resumption of the upward trend, so buying may continue on Tuesday.

Trading Recommendations:

Today, traders may consider short positions targeting 1.3615-1.3633 if the price bounces off the 1.3671-1.3681 area. Long positions will become relevant with a target of 1.3751-1.3763 if the price breaks through the area of 1.3671-1.3681.

Explanations for the Illustrations:

• Support and Resistance Levels: Thick red lines where the movement may end. They are not sources of trading signals.
• Kijun-sen and Senkou Span B Lines: Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour timeframe. They are strong lines.
• Extreme Levels: Thin red lines where the price previously bounced. They are sources of trading signals.
• Yellow Lines: Trend lines, trend channels, and any other technical patterns.
• Indicator 1 on COT Charts: The size of the net position for each category of traders.