Trading Recommendations and Trade Analysis for GBP/USD on November 13. Pound Falls Again

[Ben Graham]

GBP/USD Analysis on 5M

The GBP/USD currency pair started on Wednesday with another decline, which is quite difficult to explain. If the day before there was an outright disappointing unemployment report in the UK that triggered a drop in the pound, yesterday saw no significant events in either the US or the UK. Nevertheless, the pound sterling continued to trend downwards. The Kijun-sen line saved the pound from further decline, as the price pierced it and even went below, but then rebounded. Thus, in the absence of news and events on Wednesday, the movements were purely technical. The trend is beginning to shift upwards, with growth prospects remaining viable above the critical line. However, until the price overcomes the trend line and the Senkou Span B line, it is premature to speak of an upward trend on the hourly timeframe.

The market continues to keep the pound sterling in the background. While the euro remains relatively stable, the pound continues to languish in a local low. There are no significant growth prospects for the US dollar, but everything in Britain currently feels quite "bearish" and "dovish," which is weakening the pound. In our opinion, the upward trend for 2025 will resume, as America does not want a strong dollar, and the Federal Reserve will continue to lower rates in one way or another. However, the market is not yet ready for new long positions on the pair.

On the 5-minute timeframe, yesterday, there was an area of 1.3100-1.3115, and unfortunately, the price formed a false sell signal near it. The price settled below the specified area but could not continue falling. During the American trading session, a buy signal formed that could have been exploited, but now the upward movement must continue. The market has problems with this.

COT Report

COT reports for the British pound show that commercial traders' sentiment has been changing constantly in recent years. The red and blue lines representing the net positions of commercial and non-commercial traders frequently cross each other and are mostly near the zero mark. Currently, they are at almost the same level, indicating approximately equal amounts of long and short positions.

The dollar continues to decline due to Donald Trump's policies, so market makers' demand for sterling is not particularly significant at the moment. The trade war will continue in one form or another for a long time. The Fed will, in any case, lower rates in the coming year, leading to a decline in dollar demand in one way or another. 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 new reports.

In 2025, the pound rose significantly, but one must understand that this was due to Donald Trump's policies. Once this reason is mitigated, the dollar may begin to rise, but when this will happen is anyone's guess. It does not matter how fast the net position for the pound is increasing or decreasing. The net position for the dollar is declining in any case, and it is generally declining faster.

GBP/USD Analysis on 1H

On the hourly timeframe, the GBP/USD pair continues to form a downward trend. The dollar still lacks global reasons to strengthen, which is why we expect a resumption of growth for the pair toward the 2025 highs in almost any case. Currently, the price is held above the critical line and is attempting to overcome the trend line and the Senkou Span B line. If this attempt is successful, the trend will change to upward. We believe growth will continue in the medium term, regardless of the macroeconomic and fundamental backdrop.

For November 13, we highlight the following important levels: 1.2863, 1.2981-1.2987, 1.3050, 1.3096-1.3115, 1.3212, 1.3307, 1.3369-1.3377, 1.3420, 1.3533-1.3548, 1.3584. The Senkou Span B line (1.3190) and Kijun-sen line (1.3120) may also serve as sources for signals. It is recommended to set the stop-loss order to breakeven if the price moves in the right direction by 20 pips. The Ichimoku indicator lines may shift throughout the day, which should be taken into account when determining trading signals.

On Thursday, important reports on third-quarter GDP and industrial production are scheduled for release in the UK. These data may excite traders, leading to a spike in volatility in the morning. The US event calendar is empty.

Trading Recommendations:

Today, traders may consider new short positions if the price settles below the 1.3096-1.3115 area. However, we recommend caution with shorts at this time. Much more relevant are longs if the price is above the Kijun-sen line with a target of 1.3190.

Explanations for Illustrations:

• Support and resistance price levels are shown as thick red lines, near which the movement may end. They are not sources of trading signals.
• Kijun-sen and Senkou Span B lines are lines from the Ichimoku indicator transferred to the hourly timeframe from the 4-hour timeframe. They are strong lines.
• Extreme levels are thin red lines from which the price previously bounced. They are sources of trading signals.
• Yellow lines are trend lines, trend channels, and any other technical patterns.
• Indicator 1 on COT charts represents the size of each category of traders' net position.

The material has been provided by InstaForex Company - www.instaforex.com