GBP/USD 5-Minute Analysis

On Monday, the GBP/USD currency pair intended to launch a new wave of the upward trend that has been ongoing for several months. However, in the second half of the day, the market unexpectedly reacted to the U.S. ISM Services PMI report, allowing the dollar to improve its intraday position slightly. There was no significant rally in the U.S. currency, of course. Let us recall that last week's Q1 GDP report was a complete failure—yet the market looked the other way. Still, it's impossible to ignore the approaching recession and the potential for monetary easing by the Federal Reserve in the second half of 2025. Thus, even though the market has been ignoring virtually all dollar-positive news for two months, it's clear that such news is becoming increasingly scarce. And with that, the dollar's already slim chances for growth are fading.

For the U.S. currency to show any meaningful chart-based growth, a de-escalation of the global trade war is needed. Unfortunately, that remains virtually the only supportive factor for the dollar. Perhaps over time, traders will stop focusing solely on this and the "Trump factor," but little has changed for now. Two weeks ago, even the most recent sharp dollar surge followed President Trump's decision not to fire Jerome Powell.

Monday's movements on the 5-minute timeframe were once again technically erratic. The market continues to disregard technical levels and indicators. Technically speaking, the price bounced off the Ichimoku indicator lines during the U.S. trading session—but this rebound didn't look convincing. The 1.3288 level was ignored all day and offered no resistance to price action. Once again, we remind you that technical reference points and macroeconomic and fundamental signals are far from reliable in the current environment.

COT Report

COT reports for the British pound show that commercial traders' sentiment has constantly shifted in recent years. The red and blue lines—representing net positions of commercial and non-commercial traders—frequently intersect and mostly hover near the zero mark. That's the case now, indicating a relatively balanced number of long and short positions.

On the weekly timeframe, the price initially broke through the 1.3154 level, then surpassed the trend line, returned to 1.3154, and broke it again. Breaking the trend line suggests a high probability of further pound depreciation. However, the dollar continues to fall due to Donald Trump. Therefore, despite technical signals, news about the trade war could keep pushing the pound higher.

According to the latest report on the British pound, the "Non-commercial" group closed 2,900 BUY contracts and 6,400 SELL contracts. As a result, the net position of non-commercial traders increased by 3,500 contracts.

The fundamental backdrop still does not justify long-term buying of the pound sterling, and the currency remains at real risk of resuming a broader downtrend. The pound has gained significantly recently, but it's important to understand that this was due to Donald Trump's policies.

GBP/USD 1-Hour Analysis

On the hourly timeframe, GBP/USD maintains its upward trend, albeit slower and with occasional corrections. The pound has shown strong growth in recent months, though it owes this entirely to the dollar's weakness triggered by Trump. That dynamic is still unfolding. The market is paying virtually no attention to macroeconomic data. Thus, the chaos and lack of clear logic persist.

For May 6, we highlight the following important levels: 1.2691-1.2701, 1.2796-1.2816, 1.2863, 1.2981-1.2987, 1.3050, 1.3125, 1.3212, 1.3288, 1.3358, 1.3439, 1.3489, 1.3537. Senkou Span B (1.3322) and Kijun-sen (1.3348) lines can also be sources of signals. Setting the Stop Loss level to breakeven when the price passes 20 pips in the right direction is recommended. The Ichimoku indicator lines may shift throughout the day and should be considered when identifying signals.

On Tuesday, the U.K. is scheduled to release the second estimate of the Services PMI, which is unlikely to attract much trader attention. The U.S. macroeconomic calendar is empty. We'll likely see low volatility and a sideways trading pattern today.

Illustration Explanations:

• Support and resistance price levels – thick red lines where movement may end. They are not trading signal sources.
• Kijun-sen and Senkou Span B lines—These are strong Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour one.
• Extremum levels – thin red lines where the price has previously rebounded. These act as trading signal sources.
• Yellow lines – trend lines, trend channels, and other technical patterns.
• COT Indicator 1 on the charts – the size of the net position for each category of traders.