13.08.202604:15 Forex Analysis & Reviews: Overview of the GBP/USD Pair. August 13. Donald Trump's Zugzwang

The GBP/USD currency pair continued its upward movement on Wednesday. This time the reason for the US currency's decline was a rather bland US inflation report. Bland, but no less significant for that. Experts correctly guessed the July inflation figure, so the market reaction was not as strong as it could have been. At the same time, however, a second consecutive slowdown in consumer price growth was recorded, which makes a key rate hike, at least in September, impractical. Making any long-term forecasts is completely impractical. Inflation now largely depends on the geopolitical conflict in the Middle East. And predicting anything about the development or resolution of this conflict is a hopeless task. Only Donald Trump's rhetoric toward Iran can change three times in one day.

Thus, it is reasonable to turn to the current disposition of America and Iran to at least roughly understand what to expect in the near future. In our view, the current confrontation between Tehran and Washington is unfolding in the best traditions of a chess game. The sides have made all the moves available to them that would allow them to repel the opponent's attacks or improve their own position on the board. Now has come a period when Iran is in a solid defense, yet capable of repelling any US attacks. America, meanwhile, finds itself in a classic "zugzwang" position, where any next move will only worsen its situation. In short, Trump has no further moves to tilt Iran toward agreement or negotiations. The US president has already played all his trump cards.

Let us consider what else the US leader might undertake. New attacks on Iran? Pointless. Proven by all previous attacks and strikes. Landing on Kharg Island or a ground operation on Iranian territory? Pointless, because US forces would be utterly defeated. Trump cannot send the entire US army to the Middle East, as that would be a full-scale war in which the US would inevitably suffer high human losses. The American people would never forgive Trump for that under any circumstances. Economic and sanctions pressure? Iran already faces hundreds or thousands of sanctions that do not prevent it from trading oil with China or other East Asian countries. Iran has lived under sanctions for half a century; it is not scared by new restrictions.

But even if we assume Trump makes one of the three moves above, he will only harm himself. New missile strikes amid shortages of missiles and weapons? Trump will face a flurry of criticism from his own electorate and the Pentagon. A ground operation? Republicans would not gain a single vote in either the Senate or the House. Economic pressure and a wait-and-see approach? Iran is ready to endure and wait, and the longer the conflict continues, the higher oil and fuel prices and the higher US inflation, the lower Trump's chances in the November election. Whatever move Trump makes, his position will only worsen.

The average volatility of the GBP/USD pair over the last 5 trading days is 47 pips. For the pound/dollar pair, this value is "low." On Thursday, August 13, therefore, we expect movement within the range bounded by levels 1.3444 and 1.3538. The higher linear regression channel is sloping downward, indicating a downtrend. The CCI indicator entered the overbought area twice, which may provoke a new downward retracement.

Nearest support levels:

S1 – 1.3489

S2 – 1.3428

S3 – 1.3367

Nearest resistance levels:

R1 – 1.3550

R2 – 1.3611

R3 – 1.3672

Trading Recommendations:

The GBP/USD currency pair maintains an upward tendency. Trump's policies will continue to put pressure on the US economy, so we do not expect long-term strength from the US dollar. The year 2026 is still super-positive for the dollar because of geopolitics, but every fairy tale comes to an end. On the weekly timeframe, there remains a flat between levels 1.3150 and 1.3780 within a four-year uptrend, which suggests continued growth of the British currency in the medium term. Long positions with targets of 1.3538 and 1.3550 can be considered when the price is above the moving average. The price below the moving average line allows bearish trading, with targets at 1.3444 and 1.3428.

Explanations for Illustrations:

Linear regression channels help determine the current trend. If both are directed the same way, the trend is strong.

The moving average line (settings 20,0, smoothed) defines the short-term trend and the direction in which to trade now.

Murray levels are target levels for moves and corrections.

Volatility levels (red lines) indicate the likely price channel the pair will spend the next day in, based on current volatility indicators.

The CCI indicator — its entry into the oversold area (below -250) or the overbought area (above +250) means a trend reversal to the opposite side is approaching.