The GBP/USD currency pair continues its downward trend on the 4-hour timeframe, although by the end of last week, the British pound began to rise slightly. The British pound's rise last week was notably weak, given U.S. macroeconomic data on the labor market and unemployment. Simply put, if the dollar had dropped by 100-150 pips after the Non-Farm Payrolls and unemployment reports, that would have been the most logical outcome. However, the market did not rush to shed the safe dollar on Friday, as the conflict in Iran escalates increasingly over time.

Donald Trump mentioned over the weekend the possibility of conducting a ground operation in Iran. While Washington is currently seeking to achieve its goals through "strikes from afar," many military experts believe this is not feasible. Thus, either the goals of Trump's military operation are entirely different, or those stated will not be achievable, yet Trump will still announce a complete victory, similar to last summer, after strikes on three Iranian nuclear facilities. At that time, Trump reported their total destruction, and now he has initiated a full-fledged war to again eliminate nuclear sites.

However, we believe it is essential not to focus solely on the war in the Middle East. It is vital to understand that this is far from the first or the last conflict in the world, and it is certainly not the first or the last war over energy resources and spheres of influence. The world has learned to live with constant geopolitical tensions. If the current rise in oil, gas, and fuel prices paralyzes half of the world's economies, who is to blame? Is the Middle East, one of the largest suppliers of energy resources, now considered a super-safe region where peace and tranquility exist?

In any case, due to the worsening situation in the energy market and the lack of de-escalation in the conflict in Iran, the new week has started with a rise in the American currency once again. This time, the GBP/USD pair has not fallen below its previous local low, which still offers hope of a recovery. We believe the market has already priced in the most negative consequences and scenarios, so the dollar is on the brink of exhausting its positive fundamentals. It's worth noting that such a severe drop in the British pound over the last month could have been avoided. Yes, disappointing data has repeatedly come from the UK, but the flow of negative news from the U.S. has not ceased either.

Consequently, even after the pair fell by 550 pips, we do not believe that the upward trend on the daily timeframe has ended. By the way, on the daily timeframe, the price has bounced off the Senkou Span B line and has not managed to break through it for five days. Therefore, it is entirely possible that this decline of the British currency may come to an end here. Of course, we do not know the future or what will happen next in Iran, how many other countries will become involved in the Iranian war, and so on. To say that further growth of the dollar is impossible would be unprofessional. However, at the moment, it seems that the "feast" in honor of the dollar is over.

The average volatility of the GBP/USD pair over the last 5 trading days as of March 10 is 118 pips, which is considered "high." On Tuesday, March 10, we expect movement within the range limited by levels 1.3271 and 1.3507. The upper linear regression channel is directed upward, indicating a recovery of the trend. The CCI indicator has again entered oversold territory, signaling a possible end to the correction. A new bullish divergence has also formed.

Nearest Support Levels:

• S1 – 1.3306
• S2 – 1.3184
• S3 – 1.3062

Nearest Resistance Levels:

• R1 – 1.3428
• R2 – 1.3550
• R3 – 1.3672

Trading Recommendations:

The GBP/USD currency pair has been in correction for a whole month, but its long-term prospects remain unchanged. Trump's policies will continue to exert pressure on the U.S. economy, so we do not expect the U.S. currency to grow in 2026. Therefore, long positions with a target of 1.3916 and above remain relevant as long as the price is above the moving average. If the price is below the moving average line, small short positions can be considered with a target of 1.3271 based on technical (correction) grounds. In recent weeks, almost all news and events have turned against the British pound, prolonging the correction.

Explanations for Illustrations:

Linear regression channels help determine the current trend. If both are pointing in the same direction, it indicates a strong trend.

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

Murray levels – target levels for movements and corrections.

Volatility levels (red lines) – the probable price channel in which the pair will trade over the next 24 hours based on current volatility indicators.

The CCI indicator – its entry into the oversold territory (below -250) or overbought territory (above +250) indicates that a trend reversal in the opposite direction is approaching.