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12.10.2026 05:21 AM
The GBP/USD currency pair continued trading within a two-week sideways channel on Friday, clearly visible on the hourly chart. Similar channels have formed on the daily and weekly timeframes. Thus, the pound sterling remains inside a triple flat. In all three cases, price sits near the lower boundary of the sideways channel. Therefore, in the near term the price will either bounce off these boundaries and begin a rise—whose strength will depend on whether the market has finished its baseless dollar buying—or break out of all three sideways channels, thereby confirming intentions to continue falling. Also note that many local and global price lows cluster in the current area; liquidity may be taken from these levels, followed by a higher reversal. If we talk about fundamental/macro reasons for further dollar strength, we still don't see them. Once again in 2026 the dollar squeezed the maximum benefit from the situation. However, on the weekly timeframe, it is clear that the dollar has managed only a correction within the flat, even in a super-positive environment for itself. Essentially, the US currency has not risen in 2026 from a long-term perspective.
Technically, the British pound continues to form a downward trend despite breaking the trendline. Recall that in flat conditions, breaking the trendline does not mean a change to the opposite trend. A flat is a market pause and shouldn't count when determining the trend. Below the Senkou Span B line, the downside bias remains.
On the 5-minute timeframe, two decent sell signals formed on Friday. The price bounced twice off the 1.3245–1.3248 area, allowing it to move down 20–30 pips. Traders could have easily captured those 20–30 pips on Friday by closing the trade during the US session.
COT reports for the pound show that non-commercial traders have dominated on the sell side for several months. The net position is negative, despite the preservation of the long-term uptrend. Given events in the Middle East, it is unsurprising that demand for the dollar remains fairly high in 2026. The war between the US and Iran has been formally paused, but a new conflict has begun within Yemen. The Federal Reserve's shift in monetary policy also supports the dollar, and the uptrend line has been breached. However, it was breached within a flat, so we do not consider the uptrend finished.
In the long term, the dollar continues to decline due to Donald Trump's policies, which is clearly visible on the weekly timeframe. The trade war will continue in one form or another for a long time, and Trump's policies aim, directly and indirectly, to weaken the US currency. The long-term uptrend remains intact. According to the latest COT report (October 6), the "Non-commercial" group opened 3,800 BUY contracts and 10,400 SELL contracts. As a result, non-commercial traders' net position fell by 6,600 contracts over the week.
On the hourly timeframe, GBP/USD continues to form a downward trend and has been flat for two weeks. The Fed's decision and stance in September changed a lot in the prospects for the US dollar and the market's attitude toward it. We would say a "black swan" has arrived in the market twice this year, supporting the dollar when no one expected it. Now a third "black swan" may arrive in the form of a war in Yemen, which could potentially lead to a blockade of the Bab-el-Mandeb Strait.
For October 12 we highlight the following important levels: 1.3042–1.3050, 1.3096–1.3115, 1.3179–1.3187, 1.3248, 1.3301–1.3309, 1.3369–1.3377, 1.3465–1.3480, 1.3588, 1.3671–1.3681. The Senkou Span B (1.3301) and Kijun-sen (1.3245) lines may also be sources of signals. It is recommended to move the Stop Loss to breakeven once price has moved 20 pips in the correct direction. The Ichimoku indicator lines may shift during the day, so take this into account when determining trading signals.
Today, no major publications or events are scheduled in the UK or the US. Therefore, the pair will most likely remain within the two-week sideways channel today, and market moves will be weak.
Traders may consider the 1.3179–1.3187 area as a target for short positions if price rebounds from the 1.3245–1.3248 area. A close above the 1.3245–1.3248 area would make the 1.3301–1.3309 area a target for long positions.
