The GBP/USD currency pair moved quite weakly throughout Thursday, despite the abundance of macroeconomic information during the day, especially in the morning. However, the market's disregard for macroeconomic reports should no longer surprise or confuse anyone. The market has been engaging in this behavior for three months. Just on Wednesday, another important inflation report from the UK was ignored, which, moreover, showcased a resonant figure. Based on this figure, it can be concluded that the Bank of England will not tighten monetary policy in June, although until recently, traders were confident about this. We assume that this report was factored in last week when the British pound fell by 300 points. Yet at the same time, the market could not have anticipated that actual inflation would turn out even lower than the most pessimistic forecasts. Therefore, the mere fact of slowing inflation might have been reflected in last week's activities, while the report on Wednesday was ignored.

Naturally, the business activity indexes for the UK's services and manufacturing sectors did not interest anyone. The British pound made two decent gains this week, but these gains were driven solely by geopolitical news. Specifically, "news" because there have not been any actual events lately. How does this work? Either Donald Trump or Iranian officials makes another conciliatory or bellicose statement, and the market immediately begins to anticipate the signing of a deal or the resumption of war. And such messages can appear several times in a single day. The pound sterling recovered somewhat, but by the end of the week, Trump could very well resume hostilities, and Iran may once again reject Washington's "fairy-tale" offer.

Let us remind you that Iran is no pushover either. It has no intention of giving up nuclear energy, demands reparations for all the destruction, insists on full control over the Strait of Hormuz, seeks security guarantees, a complete ceasefire, and many other conditions that would satisfy neither the US nor anyone else. Thus, at present, it remains unclear what exactly the conflicting parties are negotiating, especially since we only see lists of demands in the press that do not align with one another.

Therefore, the pound sterling, like the entire currency market, may continue to swing back and forth. Up today, down tomorrow. Market optimism regarding a peace agreement has not been confirmed, but pessimism about the resumption of war has not been either. Hence, it is best to trade intraday now, focusing on analyzing all incoming data except macroeconomic reports. On the daily time frame, despite constant downward corrections, the upward trends of 2022 and 2025 remain intact, so a resumption of the trend can be expected once the negotiation chaos between Iran and the US reaches a logical conclusion.

The average volatility of the GBP/USD pair over the last 5 trading days is 90 pips. For the pound/dollar pair, this value is considered "average." On Friday, May 22, we expect movement within a range bounded by 1.3349 and 1.3529. The upper channel of the linear regression points upward, indicating a recovery of the upward trend. The CCI indicator has not generated any signals recently.

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 has sharply plummeted, so the upward trend is currently not relevant. Trump's policies will continue to exert pressure on the US economy, so we do not expect the US currency to grow in the long term. However, 2026 is still looking super positive for the dollar. Thus, long positions targeting 1.3489 and 1.3529 can be considered if the price is above the moving average. When the price is below the moving average line, bearish trades can be executed with targets of 1.3349 and 1.3306 based on technical grounds. The market situation has turned upside down in just one week.

Explanations for the Illustrations:

• Linear Regression Channels: Help define the current trend. If both are directed in the same direction, it indicates a strong trend.
• Moving Average Line (settings 20,0, smoothed): Determines the short-term trend and direction in which trading should be conducted.
• Murray Levels: Target levels for movements and corrections.
• Volatility Levels (red lines): Likely price channel where the pair will trade in the coming days based on current volatility metrics.
• CCI Indicator: Its entrance into the oversold zone (below -250) or the overbought zone (above +250) indicates that a trend reversal is approaching in the opposite direction.