The GBP/USD currency pair continued to trade within a limited price range on Tuesday, with movements over the past week resembling a seesaw. The British pound has been unable to break out of the 1.3250-1.3464 range for more than a week. It is unlikely that the recent market movements can be classified as a flat or coincidence. This time, fundamental and geopolitical events have indeed provoked a continuous shift in market sentiment. Therefore, the rise of the British pound on Monday effectively means nothing. The "hawkish" results from the Bank of England meeting carry little weight. Hints from European central banks about raising key rates this year mean nothing. The Federal Reserve's rejection of any policy easing, at least until the end of the year, also means nothing. Everything depends on when and how the conflict in the Middle East resolves and when the Strait of Hormuz will be unblocked. If the war ends tomorrow (and with Trump, this possibility cannot be excluded), inflation simply won't have time to spike to levels that require central banks' "hawkish" intervention. Conversely, if the war lasts for years (which is also not out of the question), the Fed might follow the examples set by the European Central Bank and the Bank of England.

From our perspective, Trump's policies are entirely based on what personally benefits him as the American president. Donald Trump has everything in his life, so in his later years, he may be only interested in power and making his name known in US history. This is precisely why Trump passionately wanted to receive the Nobel Peace Prize and has "ended a dozen wars around the world." The Republican leader wants to frequently feature in historically significant events and be regarded as the best or at least one of the best presidents in US history.

Thus, Trump will do what benefits him personally rather than America. What is advantageous for the occupant of the White House right now? It is beneficial for Trump to conclude the war, declaring a complete victory over Iran and the destruction of the country's entire nuclear potential. In that case, his name will be written in history textbooks, and there may even be another monument in some American town to "the man who prevented a nuclear strike on the USA."

If the conflict with Iran continues, any thoughts of monetary policy easing can be set aside. Even Kevin Warsh won't change the situation, as his votes with Stephen Miran won't be enough to tip the scales in their favor. And Trump needs "unprecedented economic growth rates," which we currently know only from the president's statements. Currently, the US economy is growing at a rate lower than during Joe Biden's presidency, who did not wage wars, did not expel anyone from the States, did not sue anyone, did not impose trade tariffs, and did not pressure the Fed. Thus, the economic results for the US under Trump are extremely poor at this point. Americans, having tripped over the same stone twice already, are unlikely to do so a third time.

The average volatility of the GBP/USD pair over the last 5 trading days is 157 pips, which is considered "high" for this pair. Therefore, on Wednesday, March 25, we expect movement within the range limited by levels 1.3231 and 1.3545. The upper linear regression channel has turned sideways, indicating a trend reversal. The CCI indicator has entered the oversold area twice, further signaling the completion of the correction and forming a "bullish" divergence.

Nearest Support Levels:

S1 – 1.3306

S2 – 1.3184

S3 – 1.3062

Nearest Resistance Levels:

R1 – 1.3428

R2 – 1.3550

R3 – 1.3672

Trading Recommendations:

The GBP/USD pair has been correcting for a month and a half now, but its long-term outlook has not changed. Trump's policies will continue to exert pressure on the US economy, so we do not expect the US dollar to grow in 2026. Thus, long positions targeting 1.3916 and above remain relevant as long as the price is above the moving average. If the price is below the moving average line, small shorts can be considered with targets at 1.3231 and 1.3184 based on geopolitical factors. In recent weeks, almost all news and events have turned against the British pound, prolonging the correction.

Explanations for Illustrations:

Linear regression channels help determine the current trend. If both are directed in the same direction, it indicates a strong trend;

The moving average line (settings 20,0, smoothed) determines the short-term trend and direction in which trading should currently be conducted;

Murray levels are target levels for movements and corrections;

Volatility levels (red lines) indicate a probable price channel in which the pair will trade over the next 24 hours based on current volatility readings;

The CCI indicator entering the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal in the opposite direction is approaching.