GBP/USD 5-Minute Analysis

The GBP/USD currency pair fell by "only" 200 pips on Friday, which was hardly expected. Yes, the number of NonFarm Payrolls exceeded forecasts, and Jerome Powell once again reaffirmed the Federal Reserve's hawkish stance. However, in the past, similar data and statements were not always reflected in market moves. As we've mentioned before, perhaps the market simply took profits on long positions. It's also possible that the uptrend on the 4-hour timeframe has ended. Remember, the long-term downtrends on the daily and monthly timeframes are still in place. If Powell believes current uncertainty is at a peak, we believe the same applies to the currency market.

What do we see on the hourly timeframe? First, the pair traded sideways for nearly a month. Then, after Trump introduced new tariffs, it surged 300 pips— only to crash 340 pips afterward. How can such moves be classified as part of any clear trend? The 4-hour chart doesn't look much better. Only on the daily chart is there some clarity: the pair is in a corrective uptrend following a previous decline, which has now taken on an abnormal scale. Still, the technical picture suggests a possible resumption of the decline toward the 1.20 area and below. Of course, it's hard to imagine what might drive such a strong dollar rally at this stage — though few predicted the dollar's recent collapse either...

Many trading signals were on the 5-minute chart Friday, but most were either random or inaccurate. The movements were too volatile to expect precise signals. The only one worth noting was a bounce from the Kijun-sen line at the start of the U.S. session, which at least partly aligned with the fundamental and macroeconomic backdrop.

COT Report

COT reports for the British pound show that sentiment among commercial traders has been constantly shifting in recent years. The red and blue lines, which represent the net positions of commercial and non-commercial traders, frequently cross and mostly hover around the zero line. At present, they remain close together, indicating a relatively balanced number of long and short positions.

On the weekly timeframe, the price first broke through the 1.3154 level, then overcame the trend line, returned to 1.3154, and bounced off it. Breaking the trend line suggests a high probability that the pound's decline will continue. The bounce from 1.3154 increases the likelihood of this scenario. Once again, the weekly chart looks as though the pound is preparing to move south.

According to the latest report on the British pound, the "Non-commercial" group closed 4,000 long contracts and opened 5,600 short contracts. As a result, the net position of non-commercial traders fell by 9,600 contracts.

The fundamental backdrop still provides no basis for long-term buying of the British pound, and the currency itself still has real potential to continue the global downtrend. The recent rally in the pound was driven by one factor alone — Donald Trump's policy.

GBP/USD 1-Hour Analysis

On the hourly chart, GBP/USD showed a sharp upward spike after nearly a month of sideways movement — followed by an even steeper drop. Despite the pound rising for three months, it had no merit. The entire upward movement reflected the falling dollar triggered by Donald Trump. What's most interesting is that this trend could end at any moment, no matter how strong or stable it may appear. Everything Trump has done in recent months has only complicated the technical picture across all timeframes.

For April 7, we highlight the following key levels: 1.2511, 1.2605–1.2620, 1.2691–1.2701, 1.2796–1.2816, 1.2863, 1.2981–1.2987, 1.3050, 1.3119, 1.3175, 1.3222, 1.3273, 1.3358. The Senkou Span B line (1.2939) and the Kijun-sen line (1.3042) may also act as signal zones. A Stop Loss should be set to breakeven after the price moves 20 pips in the right direction. The Ichimoku indicator lines may shift throughout the day, which should be considered when determining signals.

No significant economic events are scheduled on Monday in the U.S. or the U.K., but we must understand that the Global Trade War is only gaining momentum. Each day, we can see new information about tariffs and sanctions worldwide. One way or another, this information could impact currency exchange rates — and predicting it is nearly impossible.

Illustration Explanations:

• Support and Resistance Levels (thick red lines): Thick red lines indicate where movement may come to an end. Please note that these lines 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. These are strong lines.
• Extreme Levels (thin red lines): Thin red lines where the price has previously bounced. These serve as sources of trading signals.
• Yellow Lines: Trendlines, trend channels, or any other technical patterns.
• Indicator 1 on COT Charts: Represents the net position size for each category of traders.