On Tuesday, the GBP/USD currency pair also traded fairly calmly, and the evening plunge of the British currency is just as hard to explain as the fall of the euro. The market once again finds itself in an emotional state, so it's no surprise to see illogical and irregular movements.

Naturally, the "culprit" yet again was Donald Trump, who moved from words to deeds and decided to fire FOMC member Lisa Cook as if she were his personal subordinate. Trump issued no actual decree, and he doesn't have the authority to simply fire Federal Reserve members. Otherwise, he would have fired Jerome Powell a long time ago.

However, as we've said before, Trump couldn't fire Powell even under the weight of allegations invented by his team. For some reason, none of the relevant authorities bothered to investigate the budget and actual spending on the Fed's building renovations. And even if there was overspending, why should Powell be responsible? Is the Fed Chair really supposed to handle not just monetary policy but also budget and implementation of building projects?

In essence, a new American comedy series has started—"Trump's War with the Fed." In the near future, we can expect a showdown between Lisa Cook and Trump, and the "sword of Damocles" could soon hang over other FOMC members as well. Naturally, this only applies to those who do not want to vote to cut the key rate—and those who aren't Republicans. Now it's clear to everyone why, this summer, Christopher Waller and Michelle Bowman suddenly "changed their stripes" and started voting for monetary policy easing. For one, they're Republicans. For another, they really don't want to lose their jobs.

Trump's strategy may not be about firing Cook as much as about signaling to other FOMC officials what awaits them in the near future. And if any member of the FOMC has a couple of "skeletons in the closet," there should be no doubt—Trump's team works more professionally than Sherlock Holmes and Dr. Watson. In effect, Trump is hinting to other Fed governors that it would be better to vote as he wants. Otherwise, someone else could soon be accused of machinations or falsification.

It's almost comical, but based on Trump's actions—who in the first six months of his second term has broken every conceivable US law—it seems only criminals work at the Fed. What trust can investors have in the dollar? What trust can they have in the US government when everyone understands "where the root of the problem lies"? In our view, Trump is only exacerbating the dollar's decline, which has been teetering on the brink of a new collapse in recent months. However, the "fundamental hammer" continues to strike the dollar, so the "2025 trend" is likely to go on.

Technically, the GBP/USD pair has corrected downward enough to have every reason to resume its uptrend. On the daily timeframe, it still appears to be an uptrend that shows no signs of ending.

The average volatility for GBP/USD over the past five trading days is 87 pips, which is "average" for the pair. For Wednesday, August 27, we expect movement within the range bounded by 1.3394 and 1.3568. The higher regression channel is pointing up, indicating a clear uptrend. The CCI indicator has entered oversold territory twice, signaling a likely resumption of the uptrend. Additionally, several bullish divergences formed prior to the new growth phase.

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 completed another downward corrective cycle. In the medium term, Trump's policies are likely to continue putting pressure on the dollar. Thus, long positions with targets at 1.3611 and 1.3672 remain much more relevant if the price is above the moving average. If the price is below the moving average, modest short positions targeting 1.3394 are justified purely on technical grounds. Occasionally, the US currency exhibits corrective moves, but for a trend reversal and recovery, there must be clear signs that the global trade war is coming to an end.

Explanation of Illustrations:

Linear Regression Channels help determine the current trend. If both channels are aligned, it indicates a strong trend.

Moving Average Line (settings: 20,0, smoothed) defines the short-term trend and guides the trading direction.

Murray Levels act as target levels for movements and corrections.

Volatility Levels (red lines) represent the likely price range for the pair over the next 24 hours based on current volatility readings.

CCI Indicator: If it enters the oversold region (below -250) or overbought region (above +250), it signals an impending trend reversal in the opposite direction.