Trading Recommendations and Trade Review for GBP/USD on September 7. The Pound Sees No Reason to Worry

The GBP/USD currency pair showed a modest decline on Friday, triggered by very strong US Nonfarm Payrolls and a neutral unemployment rate. However, traders likely understand that when Nonfarm Payrolls exceed forecasts threefold and the previous two months are revised up, one would expect a powerful move and a strong rise in the US dollar. Instead, we saw a 50-pip rise in the dollar over about half an hour and no more. Thus the market's reaction to the report was extremely muted, and traders did not deem it necessary to buy the dollar even on such a strong and important print. This suggests traders regard the chances of a Federal Reserve rate hike in September as low. Meanwhile, the European Central Bank may deliver a real rate hike this week — its second this year. As we said earlier, while the Fed hesitates, the ECB tightens. From our perspective, the euro and the pound are more likely to resume gains than the dollar is to continue its rally. This does not guarantee sterling will rise, but its outlook for the week is quite positive.

Technically, the pound has completed the downtrend as the trendline was broken. In the near term, price may head toward the Senkou Span B line, which is the last support for bears. A break above that line would confirm a shift to an uptrend on the hourly timeframe.

On the 5-minute TF on Friday, two trading signals formed, but both were difficult to trade. First, the pair broke a critical line and then bounced from 1.3480. The first signal occurred immediately after the Nonfarm release, making it almost impossible to enter. The second signal allowed traders to capture a few dozen pips.

COT reports for the pound show non-commercial traders have dominated with short positions for several months. The net position is negative despite the long-term uptrend. Given events in the Middle East, high demand for the dollar in H1 2026 is unsurprising. The war is formally not over, and only geopolitics could support the dollar in the near term. However, until the pair closes below the trendline, we would not expect a strong fall.

In the long term, the dollar should continue to weaken due to Donald Trump's policies, which is evident on the weekly TF. The trade war will persist in one form or another, and Trump's policy tends to weaken the dollar. The long-term uptrend for the pound remains, as shown by the trendline. According to the latest COT (Sept 1), Non-commercials closed 8,200 BUYs and 3,100 SELLs, so the non-commercial net position decreased by 5,100 contracts that week.

On the hourly TF, GBP/USD may begin a new upward trend. Medium- and long-term, the pound remains biased upward, so further gains would be logical. We still see no compelling reasons for prolonged dollar strength, and last week's important US reports did not provide meaningful support for the dollar.

For September 7 we highlight these 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. Senkou Span B (1.3600) and Kijun-sen (1.3518) may also supply signals. Move Stop Loss to breakeven when price moves 20 pips in the favorable direction. Ichimoku lines can shift intraday and should be accounted for when taking signals.

No major events are scheduled in the UK or the US on Monday, so expect a quiet day amid a very eventful week. Volatility may be low.

Today, traders may open short positions targeting 1.3369–1.3377 if price holds below the 1.3465–1.3480 area. Long positions can be opened on a bounce from 1.3465–1.3480 targeting 1.3588–1.3600.