Analysis of GBP/USD 5M
The GBP/USD currency pair showed no notable movement throughout Tuesday, and there were no significant events during the day. At this time, there are no geopolitical news reports, aside from various concerns about the future nuclear deal. However, that is still far off. An important inflation report will be released in the UK this morning, addressing whether we should expect the Bank of England to tighten monetary policy in 2026. In the evening, the results of the Federal Reserve meeting will be announced, and the next day, during the day, the results of the BoE meeting will be announced. We would like to say that we are expecting a 36-hour storm, but unfortunately, all the aforementioned events can be easily ignored by the market. Inflation may align with forecasts, and central banks are not looking to make significant decisions in June. The volatility of the GBP/USD pair remains low.
From a technical standpoint, the downward trend has been canceled since the price has overcome the lines of the Ichimoku indicator. However, whether the upward movement will continue is still a big question. Everything will depend on geopolitics. If it turns out that the ceasefire has once again broken down, the dollar will rise again, and the British pound will fall. Iran and Pakistan have confirmed they have reached an agreement, but on Monday, Trump threatened Iran again with strikes if they refuse to sign the nuclear deal in the future. How Iran and the US plan to find common ground on the nuclear issue remains a mystery for many.
On the 5-minute timeframe, one buy trading signal was generated on Tuesday. At the very beginning of the European trading session, the price rebounded from the Ichimoku indicator area and showed some growth during the day. Thus, in the evening, traders could take profits of around 15-20 pips.
COT Report
COT reports on the British pound show that in recent years, commercial traders' sentiment has been constantly changing. The red and blue lines, representing the net positions of commercial and non-commercial traders, frequently cross each other and are often close to the zero mark. Currently, the lines are moving apart, with non-commercial traders still dominating with... sales. Given the events in the Middle East, it is not surprising that demand for risk-sensitive currencies is low.
In the long term, the dollar continues to decline due to Donald Trump's policies, as seen on the weekly timeframe (illustration above). The trade war will continue in one form or another for a long time, and Trump's policies are aimed directly and indirectly at weakening the US currency. However, geopolitical factors currently take precedence, which have recently provided strong support for the dollar. As the conflict in the Middle East is not yet resolved, the US dollar may still show growth prospects. According to the latest COT report (as of June 9), the "Non-commercial" group closed 7,900 BUY contracts and opened 4,000 SELL contracts. Thus, the net position of non-commercial traders decreased by 11,900 contracts over the week.
Analysis of GBP/USD 1H
On the hourly timeframe, the GBP/USD pair has begun forming a new upward trend amid the warming of relations between Iran and the US. The macroeconomic and fundamental background still has little influence on the pair's movements (with rare exceptions). Without a real escalation of the conflict in the Middle East, the dollar can show a strong trend, while de-escalation and a peace deal will support further growth in the pair.
For June 17, we highlight the following important levels: 1.3096-1.3115, 1.3179-1.3187, 1.3301-1.3309, 1.3369-1.3377, 1.3465-1.3480, 1.3588, 1.3671-1.3681, 1.3751-1.3763. The Senkou Span B line (1.3396) and the Kijun-sen line (1.3389) can also serve as signal sources. It is recommended to set the Stop Loss at breakeven after the price moves in the correct direction by 20 pips. The lines of the Ichimoku indicator may move throughout the day, which should be taken into account when determining trading signals.
On Wednesday, the UK inflation report for May is scheduled for publication, and in the US, the results of the Fed meeting will be announced. Both events are considered important, but it is unclear whether there will be a noticeable market reaction. Recently, volatility in the currency market has been steadily decreasing.
Trading Recommendations:
Today, traders may consider short positions with a target of 1.3301-1.3309 if the pair consolidates below the 1.3369-1.3377 area. Long positions will become relevant in the event of a bounce from the Senkou Span B line with a target of 1.3465-1.3480.
Explanations for the Illustrations:
Support and resistance price levels (resistance/support) – thick red lines around which movement may end. They are not sources of trading signals.
Kijun-sen and Senkou Span B lines – Ichimoku indicator lines transferred from the 4-hour timeframe to the hourly timeframe. They are strong lines.
Extreme levels – thin red lines from which the price previously rebounded. 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 of each category of traders.
