The GBP/USD pair resumed its upward movement on Monday. Last week, the price rebounded from imbalance 17, thus forming a sell signal. However, earlier a stronger buy signal had been formed in the shape of a "Three Drives Pattern," and the trend remains bullish. In addition, a bullish signal may form today for the euro, which could also have a positive impact on pound bulls. The current chart picture is contradictory, as are many other events and factors.
On Friday, the Nonfarm Payrolls and unemployment reports were expected to trigger new bearish attacks—but they did not. On Monday, Donald Trump stated that he would devastate Iran on Tuesday if the Strait of Hormuz was not reopened. Yet again, the dollar did not show growth. The ISM Services PMI in the US was also ignored. The situation is ambiguous, and traders are lying low ahead of a new information shock.
Washington has recently shown a desire to end the war—but on its own terms. Iran, in turn, is willing to end it on its own terms. Likely because Iran is still not ready to accept Washington's ultimatums, we are witnessing Trump's daily angry rhetoric. Traders are alternately reacting to improvements and deteriorations in the geopolitical backdrop. However, for stronger growth in either the pound or the dollar, real evidence of de-escalation or escalation is needed—not just words.
The probability of a decline in both pairs remains quite high, and all discussions about a potential bullish offensive at this stage are merely assumptions without confirmation or facts. At the same time, I would like to highlight once again the important and relatively rare "Three Drives Pattern," marked on the chart with a triangle. It consists of three consecutive swings, each slightly lower or higher than the previous one. It signals the completion of a bearish impulse (in this case). Thus, technical analysis suggests decent chances for a bullish advance, but bulls urgently need support from geopolitics.
As long as the bullish trend remains intact (above the 1.3012 level), I would focus more on bullish signals. However, there are currently no bullish patterns or signals, and geopolitics could bring down the pound sterling at any moment.
The news background on Tuesday was fairly weak. Donald Trump once again threatened Iran with total destruction if the Strait of Hormuz was not reopened by the evening of April 7, while the US released a report on durable goods orders. Neither event impressed traders.
In the US, the overall fundamental backdrop remains such that, in the long term, little can be expected other than a decline of the dollar. Even the conflict between Iran and the US changes little. The situation for the US dollar remains quite challenging in the long term and only positive in the short term. The labor market continues to weaken, the economy is moving closer to recession, and the Federal Reserve—unlike the ECB and the Bank of England—is not planning monetary tightening in 2026. Across the US, a fourth major wave of protests against Donald Trump has already taken place. From an economic standpoint, there are no solid reasons for dollar growth.
A bearish trend requires a strong and stable positive information background for the dollar, which is difficult to expect under Donald Trump. For now, geopolitics has supported the dollar for over a month, but this support will eventually begin to fade. It is difficult to say when this will happen, so it cannot be ruled out that the US currency may continue to rise for another week, month, or even several months.
Economic Calendar for the US and the UK:
- US – FOMC Minutes (18:00 UTC).
On April 8, the economic calendar contains only one secondary entry. The impact of the news background on market sentiment on Wednesday may be minimal. Traders are waiting for geopolitical news.
GBP/USD Forecast and Trading Tips:
For the pound, the long-term picture remains bullish, but there are currently no active bullish patterns. The decline of the pair in recent weeks has been so strong due to an unfortunate combination of circumstances. If Donald Trump had not initiated the conflict in the Middle East, we likely would not have seen such strong dollar growth. I believe this decline may end just as unexpectedly as it began. However, at the moment, the bearish move cannot yet be considered complete.
In the near term, traders can rely only on a signal within bearish imbalance 17. The signal has already formed, giving traders an opportunity to sell the pound with a target around the 1.3000 level. However, this signal may be contradicted by geopolitics, a potential bullish signal in the euro, and is already contradicted by the bullish "Three Drives Pattern."
