Analysis of GBP/USD 5M

The GBP/USD pair turned upward on Thursday and closed above the critical line and the trendline. Thus, there are grounds to assume the end of the two-week downtrend. However, note that today the US will publish key labor reports and the unemployment rate, so if they print strong readings, the dollar may resume rising. Overall, we can say the market is once again losing faith in a September Federal Reserve rate hike. These swings of expectations have become tiresome. The market reacts to Kevin Warsh's speeches, official statistics, and other Fed officials' statements, yet cannot decide what to expect from the US central bank. Thus we continue to see constant shifts in market sentiment. The macro backdrop this week had little effect on the pair's moves because all US reports except yesterday's were weak. Nevertheless, the dollar held up well throughout the week, except on Thursday. The dollar's drop on Thursday may mean the technical correction is over, and the market expects weak Unemployment and Nonfarm Payrolls reports.

Technically, the pound completed the downtrend as the trendline was broken. If today's labor and unemployment reports disappoint, GBP may quickly return to the Senkou Span B line. Overcoming Senkou Span B would allow the pair to resume a medium-term uptrend.

On the 5-minute TF on Thursday, two trading signals were generated. During the European session, the price bounced between 1.3465 and 1.3480, and during the US session, the Kijun-sen line was worked out. Thus, traders could have opened a long position in the morning and taken profit in the evening.

COT Report

COT reports for the pound show that non-commercial traders have dominated, with shorts, for several months. The net position is negative despite the long-term uptrend. Given the Middle East events, it is unsurprising that demand for the dollar was high in H1 2026. The war is formally not over, and only geopolitics could support the dollar in the near term. However, until a break below the trendline, we would not expect a strong fall in the pair.

In the long term, the dollar should continue to weaken due to Trump's policies, visible on the weekly TF. The trade war will continue in one form or another, and Trump's policy tends to weaken the dollar. The long-term uptrend for the pound remains, as shown by the trendline. According to the last COT (Aug 25), Non-commercials opened 16,300 buy positions and 6,200 sell positions, so the net position of non-commercial traders rose by 10,100 contracts that week.

Analysis of GBP/USD 1H

On the hourly TF, GBP/USD may begin a new upward trend. Medium- and long-term, the pound remains biased upward, so further rises are logical. We still see no strong reasons for prolonged dollar strength, and today's US reports may finally dispel market hopes for a Fed rate hike.

For September 4 we highlight these important levels: 1.3042–1.3050, 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. Senkou Span B (1.3575) and Kijun-sen (1.3535) may also be signal sources. Move Stop Loss to breakeven when price moves 20 pips in the correct direction. Ichimoku lines may shift during the day; account for that when determining trading signals.

No major UK publications today; in the US, the most important reports are on the labor market and unemployment. Thus, the price may significantly "fly" in the afternoon. Volatility is expected to be high today.

Trading recommendations:

Today, traders may open short positions targeting 1.3465–1.3480 if price bounces from the critical line or Senkou Span B. Long positions can be opened on a break above Kijun-sen or Senkou Span B with targets at 1.3671–1.3681.

Explanations for the illustrations:

• Support and resistance price levels — thick red lines near which the movement may end. They are not sources of trading signals.
• Kijun-sen and Senkou Span B lines — Ichimoku lines transferred to the hourly TF from H4. They are strong lines.
• Extreme levels — thin red lines from which price previously bounced. They are sources of trading signals.
• Yellow lines — trendlines, trend channels, and other technical patterns.
• Indicator 1 on COT charts — the size of the net position for each trader category.