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The GBP/USD currency pair also did not show interesting movements on Tuesday, continuing its decline just in case. Why the British pound is falling right now is a mystery. While the downward movement initially appeared to be a technical correction, fully justified, the pound has been falling nearly every day for a week and a half now. Why? Because the Federal Reserve may raise rates by the end of the year? Because the geopolitical conflict in the Middle East is far from being fully resolved? Then we have more bad news for traders. With Donald Trump's current stance, this conflict could be eternal.
Yesterday, the American president once again stated that "very good negotiations" are underway with Iran. Let's recall that earlier analytical agencies calculated that Trump has already succeeded 38 times in the war against Iran. I wonder how many times Trump has claimed that "very good negotiations" are taking place? Perhaps the negotiations are indeed very good, cheerful, and almost taking place in a homely atmosphere because the American delegation is not traveling anywhere and is not negotiating with anyone. In Tehran, for example, they were once again astonished when they heard the words of the White House leader. According to the Iranian Foreign Ministry, no direct negotiations with Washington are currently taking place, and considering how many times (according to Tehran) America has violated the terms of the ceasefire, Iran has no desire to return to diplomacy. The Iranian Foreign Ministry only reported ongoing negotiations with Oman regarding joint control over the Strait of Hormuz. However, according to Trump, a deal with Iran will soon be reached. In principle, if we remember that Trump promised to end the war between Ukraine and Russia in 24 hours once he became president, we might assume that the war with Iran will continue for another couple of decades, at least.
And, by the way, there is nothing amusing about this. Back in 2022, very few believed that the confrontation between Kyiv and Moscow would drag on for 5 years. Neither side wants to make concessions, so the war continues. The same situation exists between Tehran and Washington. No concessions are being made, so the conflict could last for many years. Right now, Trump needs a pause to conduct the Congressional elections honorably, trying to maintain a Republican majority in both chambers, and afterward, the fighting with Iran could continue for at least another two years.
Let's pay attention to the dynamics of Brent prices. In the last four days, Brent has fallen by $10, which best reflects what the markets believe now. If oil prices are falling, it means that a de-escalation scenario is prevailing. However, we are currently observing another paradox: oil is falling, the dollar is rising, and the Fed hasn't even begun tightening its monetary policy yet.
Thus, the markets are currently in complete disarray. Each participant is drawing their own conclusions and forecasts and making trading decisions based on them. There is not much logic in the movements right now.
The average volatility of the GBP/USD pair over the last 5 trading days is 59 pips. For the pound/dollar pair, this value is considered "average." On Wednesday, July 29, we expect movement within a range limited by 1.3245 and 1.3363. The upper channel of the linear regression is directed downward, indicating a bearish trend. The CCI indicator has formed a bearish divergence and has entered the overbought area, signaling the onset of a downward correction.
S1 – 1.3245
S2 – 1.3184
S3 – 1.3123
R1 – 1.3306
R2 – 1.3367
R3 – 1.3428
The GBP/USD currency pair maintains an upward trend. Trump's policies will continue to exert pressure on the US economy, so we do not expect the US currency to appreciate in the long term. The year 2026 is currently looking very positive for the dollar due to geopolitics, but every fairy tale has its end. However, on the weekly timeframe, a flat persists between levels of 1.3150 and 1.3780 within a four-year upward trend, allowing for expectations of continued growth for the British currency in the medium term.
Long positions with targets at 1.3428 and 1.3489 can be considered when the price is above the moving average. If the price is below the moving average line, trading for a decline can be considered with targets at 1.3245 and 1.3184.
*Analiza tržišta koja se ovde nalazi namenjena je boljem razumevanju tržišta i ne pruža instrukcije za vršenje trgovanja.
Uz InstaSpot-ove analitičke preglede uvek ćete biti u toku sa tržišnim trendovima! Klijentima InstaSpot-a su dostupni mnogobrojni besplatni servisi za uspešno trgovanje.
