The GBP/USD currency pair also crashed down at breakneck speed on Thursday. If we were to ask traders to name the most likely cause of the pair's decline, they would likely answer correctly in all respects. Naturally, there was another address to the nation by US President Donald Trump overnight. It is difficult to understand how an "address to the nation" differs from a regular interview or a post on social media, as the leader of the White House makes the same contradictory statements in all three cases. Last night, Trump first stated that the war in Iran could conclude in a couple of weeks, only to immediately promise to "blast Iran to pieces," sending them back to the Stone Age. The market, sensing the heightened risk, rushed to buy dollars again.
Honestly, at this point, the article could be concluded because there is not much more to say. Technical factors currently hold no significance on any timeframe, except perhaps the lower ones, where traders may simply be reacting to intraday shifts in sentiment driven by the American president. The fundamental and macroeconomic background has been "on the sidelines" for about 1.5 months. On Tuesday and Wednesday, we saw a strong rise in the pair, but on Thursday, a collapse. On Friday, Trump may make new statements that will leave most people in shock, and the US will also publish important Non-Farm Payroll reports and unemployment figures.
For the sake of variety, let's discuss the economic data. The unemployment rate in the US is expected to rise to 4.5% for March, while the number of new jobs in the non-farm sector is projected to be only 50,000 to 60,000. We would like to remind traders of two important points. Adding only 50,000 to 60,000 new jobs is nothing for the American economy. To prevent the unemployment rate from rising, the economy needs 150,000 to 200,000 new jobs each month. Unemployment was increasing even under Joe Biden when Non-Farms averaged a gain of 120,000 to 150,000 each month. Therefore, 50,000 to 60,000 is insignificant.
However, the market will react not to the actual figure itself but to the relationship between the actual figure and the forecast. Therefore, if we see a figure of 70,000 to 80,000 today, that may be enough for the dollar to rise again. It's a paradox. The American economy may be in dire straits, but at the same time, the market will evaluate not the actual results but their alignment with its own expectations.
What else can be said? Predicting the pair's movement right now is possible at most within a single day, while hoping that, during the duration of the open position, Donald Trump won't make another post on Truth Social or comment from the government plane. The conflict in the Middle East is still far from over.
The average volatility of the GBP/USD currency pair over the last five trading days as of April 3 is 113 pips, which is considered "high." On Friday, April 3, we expect the pair to move within a range bounded by levels 1.3121 and 1.3347. The upper channel of linear regression has turned downward, indicating a change in trend. The CCI indicator has entered the oversold area twice and has also formed a "bullish" divergence, which once again warns of the completion of the downward trend. However, geopolitics currently outweighs technical signals.
Nearest Support Levels:
- S1 – 1.3184
- S2 – 1.3123
- S3 – 1.3062
Nearest Resistance Levels:
- R1 – 1.3245
- R2 – 1.3306
- R3 – 1.3367
Trading Recommendations:
The GBP/USD currency pair continues its downward movement, which has lasted for a month and a half, but its long-term prospects have not changed. Trump's policies will continue to exert pressure on the US economy; therefore, we do not expect the US currency to grow in 2026. Thus, long positions with a target of 1.3916 and above remain relevant when the price is above the moving average. When the price is below the moving average, short positions can be considered, with targets at 1.3184 and 1.3123, based on geopolitical factors. In recent weeks, almost all news and events have turned against the British pound, contributing to the prolonged bearish trend.
Explanations For Illustrations:
- Linear regression channels help identify the current trend. If both are directed in the same direction, the trend is strong.
- The moving average line (settings 20.0, smoothed) determines the short-term trend and the direction in which trading should currently be conducted.
- Murray levels are target levels for movements and corrections.
- Volatility levels (red lines) represent the probable price channel in which the pair will remain over the next day, based on current volatility indicators.
- CCI Indicator: Its entry into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal in the opposite direction is approaching.
