The GBP/USD currency pair resumed its upward movement overnight on Wednesday and continued rising throughout most of the day. Simply compare the euro's performance yesterday with that of the pound, even though the European currency had stronger reasons to appreciate due to another acceleration in inflation across the European Union. In principle, even traders who are accustomed to believing that the market is always right, and that if it is not, they should simply refer to the first rule, may have begun questioning whether everything is functioning normally in the currency market. The British pound is rising. Why? Because the Bank of England is expected to raise its key interest rate today? This is one reason, but the ECB has already raised interest rates twice, and no comparable upward movement has occurred. Inflation in the European Union is even higher than in the United Kingdom. The latest economic growth reports have been positive in both the United Kingdom and the European Union. In other words, the euro should currently be rising just as much as the British pound. It is the British currency that is currently following a logical and technically justified pattern. Following rebounds from the lower boundaries of two sideways channels on the daily and weekly charts, the price began a predictable upward movement toward their upper boundaries. It has been noted repeatedly that such a movement does not even require fundamental justification or specific catalysts. A sideways market is inherently unpredictable.

Nevertheless, the fact remains that the Bank of England is expected to raise its key interest rate for the first time today, and this increase is unlikely to be the only one. Most likely, the BoE will raise interest rates at least three times, while the longer-term outlook for monetary policy will depend on developments in the Middle East. If Trump decides to take an extremely aggressive approach to his political career, which unexpectedly recovered in 2024 but appeared to suffer a major setback again in 2026, the consequences for the world could be serious. Trump could resume attacks on Iran and even consider using nuclear weapons, as he appears unwilling to accept external constraints on his decisions. His desire to secure a place in history seems to outweigh his interest in ensuring a peaceful, stable, and prosperous life for Americans.

If Trump's actions on the international stage could be described as tough but effective, history might eventually forgive his methods. The American public might do the same. However, Trump's effectiveness in both domestic and foreign policy has been virtually zero. The US president could continue the conflict with Iran for another two years and then claim that the Democrats were responsible because they had restricted his funding and obstructed his efforts. Trump consistently blames the Democrats for virtually every problem, a pattern that has become familiar to the public.

Consequently, the world may now be entering a particularly dangerous period, during which Trump could become increasingly frustrated and make even more questionable decisions than before. If the conflict in the Middle East resumes, another increase in energy prices and inflation rates can be expected. In that scenario, the Bank of England, the ECB, the Federal Reserve, and other central banks would be forced to continue tightening monetary policy.

The average volatility of the GBP/USD pair over the last five trading days stands at 69 points. For the pound/dollar pair, this figure is classified as "medium." On Thursday, November 5, the pair is therefore expected to trade within a range bounded by 1.3394 and 1.3532. The upper linear regression channel has turned downward again. The CCI indicator entered oversold territory twice and also formed a bullish divergence, signaling that the downward trend was coming to an end.

Nearest support levels:

S1 – 1.3428

S2 – 1.3367

S3 – 1.3306

Nearest resistance levels:

R1 – 1.3489

R2 – 1.3550

R3 – 1.3611

Trading Recommendations:

The GBP/USD currency pair continues to follow an upward trend, which could become part of the broader trend that began in 2022. Donald Trump's policies are likely to continue putting pressure on the US economy, so significant long-term gains in the US dollar are not expected. So far, 2026 has been relatively positive for the dollar due to geopolitical developments and inflation, which have prompted capital to seek safer assets and forced the Federal Reserve to resume monetary tightening. However, a sideways range between 1.3150 and 1.3780 remains intact on the weekly timeframe within the broader four-year upward trend, supporting the possibility of further appreciation in the British currency over the medium term. Long positions with targets at 1.3532 and 1.3550 can be considered if the price remains above the moving average. If the price moves below the moving average, short positions can be considered with targets at 1.3367 and 1.3306.

Explanations for the Illustrations:

Linear regression channels help identify the current trend. If both channels point in the same direction, the prevailing trend is considered strong.

The moving average (settings: 20.0, smoothed) identifies the short-term trend and indicates the direction in which trading should currently be conducted.

Murrey levels are target levels for price movements and corrections.

Volatility levels (red lines) indicate the probable price range within which the pair is expected to trade over the next 24 hours, based on current volatility readings.

The CCI indicator: readings below -250 indicate oversold territory, while readings above +250 indicate overbought territory. Such readings suggest that a trend reversal in the opposite direction may be approaching.