The GBP/USD currency pair traded again with low volatility on Thursday, which is absolutely unsurprising. Over the past eight days, total volatility exceeded 57 pips only once. Recall that for the pound sterling, 60 pips of volatility are roughly the same as 40 for the euro. We observe some movements, but they are extremely weak, and it is difficult to make a profit on any trades or from any trading signals.

Without a doubt, the market cannot move cheerfully every day. In fact, most of the time is spent in periods of flat or low volatility, when the market is preparing for a new jump in one direction or the other. However, no trader likes "downtime." At present, the British currency has reached values at which it must either continue the upward trend that began at the end of June or form a new downward trend. What grounds are there for a new, powerful rise in the American currency? We believe none. Geopolitics can support the dollar only if the situation in the Middle East once again escalates to the brink, and the parties begin exchanging not only threats and accusations but concrete strikes regularly.

Right now it is absolutely unclear what Tehran and Washington want to achieve. Both sides of the conflict demand so much that even Santa Claus could not satisfy their wishes. Negotiations are not being held. And if they are being held, they do not end with concessions, compromises, and agreements. And if they do end, the agreements are violated literally within the next few days. It seems that both Donald Trump and Tehran are quite satisfied with the current state of affairs. Trump intends to sit and wait for Iran to suffer economic collapse. Iran intends to sit and wait for Trump and the Republican Party to suffer defeat in the midterm Congressional elections.

In essence, it is precisely the elections to the US Congress that are the point at which Tehran has no reason to move toward Washington. If Trump's party wins the elections and retains power in both chambers, Iran will have to make concessions if it truly wants to end the conflict and unblock its ports. If Trump's party is defeated, Washington will have to make concessions because the Democrats will block any new moves by Trump toward escalation with Iran.

Therefore, we believe that at least until the beginning of November no serious changes in the geopolitical situation in the Middle East will occur. The parties will continue exchanging insults without any desire to make concessions. Meanwhile, the US economy is slowing down, and the chances of monetary policy tightening are much greater for the Bank of England than for the Federal Reserve. It should also not be forgotten that Trump has resumed pressure on the central bank, again decided to fire Lisa Cook, and reminded Kevin Warsh that he expects a much lower key rate than at present.

The average volatility of the GBP/USD pair over the last 5 trading days is 48 pips. For the pound/dollar pair, this value is considered "low." On Friday, August 14, we therefore expect movement within the range bounded by levels 1.3435 and 1.3531. The higher linear regression channel is directed downward, indicating a downward trend. The CCI indicator entered the overbought area twice, which may trigger 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 trend. 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 so far has been super-positive for the dollar because of geopolitics, but every tale comes to an end. On the weekly TF, there remains a flat between levels 1.3150 and 1.3780 within a four-year upward trend, suggesting continued growth of the British currency in the medium term. Long positions with targets 1.3531 and 1.3550 can be considered when the price is above the moving average. A price below the moving average line allows trading to the downside, with targets at 1.3435 and 1.3428.

Notes on illustrations:

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

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

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 readings.

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