21.09.2026 06:15 AM
The GBP/USD pair on Friday tried to correct again and again did so weakly and unsuccessfully. At the moment, the correction looks like a routine pullback ahead of a renewed decline. It's difficult to say on what basis the market would stop selling the US dollar this week, yet over the past month it has repeatedly found reasons to do so. Therefore, if the new week ends with further losses for sterling, we would not be surprised. In our view, traders continue to ignore almost all factors supportive of the pound. The Bank of England did not hike last week, but its stance has become firmer. The BoE may conduct one or two rounds of tightening before year-end, while whether the Fed will continue tightening remains an open question. Essentially, a "who will tighten more?" game is starting. The BoE and the European Central Bank have room to raise rates further; the Fed risks political backlash, which adds uncertainty to the outlook.
Technically, sterling continues to form a downtrend. At best, the pound can expect corrective moves within that downtrend. The dollar will not rise every day as it did Wednesday evening, but yesterday's neutral BoE outcome again triggered a drop.
On the 5-minute timeframe on Friday, two trading signals formed. During the European session, price bounced off the 1.3369–1.3377 area, triggering a 25-pip fall. During the US session, price later cleared the 1.3369–1.3377 zone, which allows for some upside early next week (Monday–Tuesday). We do not expect large moves this week.
COT reports for the pound show that non-commercial traders have dominated the market with short positions for several months. The net position is negative despite the persistent long-term uptrend. Given events in the Middle East, it is unsurprising that dollar demand was high in the first half of 2026. The war is formally over, but the conflict persists. Only geopolitics can support the US dollar in the near term. However, until the pair closes below the trend line, we would not expect a sustained sharp decline.
In the long term, the dollar continues to weaken due to Donald Trump's policies, as seen on the weekly timeframe. The trade war will continue in one form or another, and Trump's policy is aimed directly and indirectly at weakening the US currency. The long-term uptrend remains, as indicated by the trend line. Price recently tested that line and bounced off it. According to the latest COT report (dated September 15), the "Non-commercial" group closed 4.2k BUY contracts and 4.3k SELL contracts. Thus, the non-commercial traders' net position rose by 0.1k contracts over the week.
On the hourly timeframe, the GBP/USD pair continues to form a downward trend. The Fed's decision and tone have dramatically changed the outlook for the US dollar. We would say that for the second time this year, a "black swan" arrived in the market, delivering unexpectedly good news for the dollar. Therefore, it is now reasonable to doubt sterling's prospects for sustained gains.
For September 21 we highlight the following 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. The Senkou Span B line (1.3515) and the Kijun-sen (1.3419) can also generate signals. It is recommended to move the Stop Loss to breakeven when the price moves 20 pips in the correct direction. The Ichimoku lines may shift during the day, which should be taken into account when determining trading signals.
No major events or releases are scheduled in the UK or the US today. Therefore, GBP/USD price action may be very weak and plainly sideways during the day.
Today, traders may open short positions targeting 1.3301–1.3309 if price consolidates below the 1.3369–1.3377 area. Open long positions if price bounces from the 1.3369–1.3377 area, targeting 1.3419 and 1.3465–1.3480.
Support and resistance price levels are thick red lines where movement may conclude. They are not sources of trading signals.
The Kijun-sen and Senkou Span B lines are Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour timeframe. They are strong lines.
Extreme levels are thin red lines from which the price has previously rebounded. They are sources of trading signals.
Yellow lines indicate trend lines, trending channels, and any other technical patterns.
Indicator 1 on COT charts shows the size of the net position of each category of traders.
