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06.11.2025 03:08 AM
The GBP/USD currency pair managed to avoid a new decline on Wednesday —what is it? A calm before a new storm? Or before another fall of the British pound? Recall that today in the UK, the results of the Bank of England meeting will be announced, and any deviation in the interest rate, in the voting on the rate, or in the central bank's accompanying statement from market expectations could provoke a significant movement. However, on Wednesday, at least two reports from the U.S. could have triggered a good movement. But instead, we saw a flat market throughout the day.
We already noted that the ADP report came in better than forecasts, but it is impossible to call its significance optimistic. Thus, theoretically, this report could have led to both a fall and a rise in the GBP/USD pair. In the end, it stirred no reaction. Another critical report published on Wednesday was the ISM services activity index. Like its "brother," the ISM index for the manufacturing sector, it showed a resonant value that did not align with most forecasts. Just as with the ADP report, it did not provoke a substantial market reaction. Thus, traders ignored two positive reports for the U.S. dollar this time around, and there remains very little logic in market movements.
On the 5-minute timeframe, only one trading signal was formed yesterday. During the European trading session, the price bounced off 1.3050, but it traded sideways throughout the day with minimal volatility. Consequently, short positions could have been closed manually at any time, yielding a profit of 10 to 20 pips.
COT reports for the British pound show that sentiment among commercial traders has fluctuated in recent years. The red and blue lines, which represent the net positions of commercial and non-commercial traders, frequently intersect and are generally close to the zero mark. At present, they are almost at the same level, indicating a roughly equal number of buy and sell positions.
The dollar continues to decline due to Donald Trump's policies, so, in principle, the demand from market makers for the British pound is not particularly significant at this time. The trade war will continue in some form for a long time. The Fed will likely lower rates in the coming year; ultimately, demand for the dollar will decline. According to the latest report (dated September 23) on the British pound, the "Non-commercial" group opened 3,700 BUY contracts and closed 900 SELL contracts. Thus, the net position of non-commercial traders increased by 4,600 contracts over the week. However, this data is already outdated, and there are no newer updates.
In 2025, the pound significantly increased, but it should be understood that the reason is singular—Donald Trump's policy. Once this reason is mitigated, the dollar may begin to rise, but when that will happen is unknown. It does not matter at what rate the net position for the pound increases or decreases; for the dollar, it is declining nonetheless and generally at a faster rate.
On the hourly timeframe, the GBP/USD pair continues to form a downward trend. The dollar still lacks global reasons to strengthen, so we expect the pair to rise toward the 2025 highs in virtually any scenario. The primary condition is for the flat movements on the daily timeframe to conclude as soon as possible. However, currently, the trend on the hourly timeframe is downward; thus, at a minimum, we should expect a break through the trend line and through the Senkou Span B line to have technical grounds for anticipating a rise in the British currency.
For November 6, we highlight the following important levels: 1.2863, 1.2981-1.2987, 1.3050, 1.3115, 1.3212, 1.3307, 1.3369-1.3377, 1.3420, 1.3533-1.3548, 1.3584. The Senkou Span B line (1.3278) and the Kijun-sen line (1.3099) may also serve as sources of signals. It is recommended to set the Stop Loss at breakeven once the price moves in the correct direction by 20 pips. The lines of the Ichimoku indicator may move during the day, which should be considered when determining trading signals.
On Thursday, the Bank of England's meeting results will be announced in the UK. We believe that the key interest rate will remain unchanged. Given the complete detachment of fundamentals and macroeconomics from market movements over the last month, we can expect movement in either direction and with varying strength. We believe the British pound has long been overdue for a rise.
Today, traders may consider entering the market at 1.3050. Short positions will become relevant on a bounce from this level, targeting 1.2981-1.2987. Long positions can be opened upon securing above 1.3050, targeting 1.3125.
