The GBP/USD currency pair continued to trade erratically and chaotically on Tuesday. While the euro formed a flat, the British pound is slowly but steadily sliding downward. However, this is not particularly important at this time. Regardless of how low the pound may fall, everyone understands the true and only reason for the British currency's decline. Once the situation in the Middle East stabilizes, the dollar will have no growth factors left.

For the sake of fairness, it should be noted that we did not expect such developments in the currency market and the Middle East in 2026. Back in January, we believed that the euro and pound would continue their steady long-term growth. But no one could predict the onset of full-scale war in the Middle East. Now, no one can forecast when and how this war will end. Donald Trump continues to speak of negotiations with Tehran that may prove successful. However, deadlines are approaching, and the U.S. president has already postponed the negotiation deadline three times. How much longer can Trump's patience last?

Having reviewed the approximate requirements of both sides, we can say one thing: the negotiating positions of the U.S. and Iran are at opposite poles. We do not believe that Washington will accept Tehran's demands, and Tehran has officially rejected Trump's 15-point ceasefire plan. Thus, the best way out of the current situation for all parties is to refrain from further bombings and continue negotiations.

Trump is eager to conclude this war, as he has essentially achieved no goals in Iran. According to many military experts, Iran is winning this war, as it has not lost its sovereignty, territory, or political course. What has Trump achieved? Higher oil and gas prices worldwide, and now Americans are cursing the day Trump became president for the second time? And those who are not cursing can continue to buy fuel at prices one and a half times higher than before, while also paying more for all imported goods because the White House leader has decided to extract tribute from American citizens as part of the fight against universal injustice towards the U.S.

Thus, if the conflict is put on pause for full negotiations, the British pound will at least have a chance not to slide further. If tonight or in the coming days the U.S. attacks Iran again, oil prices are likely to continue to rise, and the dollar will remain in demand as a "safe haven" currency.

From a technical standpoint, we are still dealing with a correction within an upward trend on the daily time frame, but it is very difficult to say when this correction will end now.

The average volatility of the GBP/USD pair over the last five trading days, as of April 8, is 95 pips, which is considered "average" for this currency pair. On Wednesday, we expect movement within a range limited by the levels of 1.3144 and 1.3334. The upper channel of the linear regression has turned downward, indicating a trend change. The CCI indicator has entered oversold territory twice and has also formed a "bullish" divergence, further hinting at the completion of the downward trend. However, geopolitics is currently more significant than technical signals.

Nearest Support Levels:

• S1 – 1.3184
• S2 – 1.3123
• S3 – 1.3062

Nearest Resistance Levels:

• R1 – 1.3245
• R2 – 1.3306
• R3 – 1.3367

Trading Recommendations:

The GBP/USD currency pair has been moving downward for a month and a half, but its long-term prospects have not changed. Trump's policies will continue to pressure the U.S. economy, so we do not expect the dollar to grow in 2026. Therefore, long positions targeting 1.3916 and above remain relevant when the price is above the moving average. When the price is below the moving average line, short positions can be considered, with targets at 1.3184 and 1.3144, based on geopolitical factors. In recent months, almost all news and events have been negative for the British pound, resulting in a prolonged downward trend. Geopolitics remains a key factor.

Explanations for the Illustrations:

• Linear regression channels help identify the current trend. If both are directed the same way, it indicates a strong trend.
• The moving average line (settings 20,0, smoothed) determines the short-term trend and the direction in which trading should currently be conducted.
• Murray levels are target levels for movements and corrections.
• Volatility levels (red lines) represent the potential price channel within which the pair is likely to trade over the coming day, based on current volatility statistics.
• The CCI indicator entering oversold territory (below -250) or overbought territory (above +250) indicates that a trend reversal in the opposite direction is nearing.