On Tuesday, the GBP/USD currency pair continued its sluggish downward movement. In principle, there is no point discussing anything other than the technical picture right now. This week, apart from geopolitical developments, there have been no significant news releases. A few completely secondary U.S. reports were the only things traders could pay attention to. As we already established, the market has decided not to rush into pricing in geopolitics, so only the technicals remain.

And what do we see on the 4-hour timeframe? The British pound rose for two consecutive weeks without a single minimal pullback. Now there is no news, so why not use this time for a technical correction? Thus, the dollar has been rising in recent days, albeit very weakly, and second, purely on technical grounds.

To understand what to expect next, one should look at the daily timeframe. There, we can see that the price reacted with perfect accuracy to the 38.2% Fibonacci retracement level of the entire upward move since the beginning of this year. In the same area was the Senkou Span B line. In other words, the price bounced from two significant support levels. At the moment, the pound sterling has consolidated above the Kijun-sen (critical line) and the current Senkou Span B value. Thus, the upward trend remains intact. Of course, the correction could push the price down by 100 or even 200 pips, but that would not change the overall picture.

The dollar has no trump cards—not in hand, not up its sleeve, not under the table. The U.S. currency was depreciating even when the Fed kept the rate at 4.5% and the Bank of England and the European Central Bank were cutting theirs. Now, starting in September, the Fed will resume monetary easing. Donald Trump has no intention of stopping and continues to impose tariffs, raise existing tariffs, and go through a second and third "tariff round." Even several signed trade deals still include the same tariffs. So what kind of de-escalation of the trade war can we talk about?

In addition, the U.S. president interferes in many processes outside his competence. We, of course, support his desire to achieve world peace, and it does not even matter to us that Trump may be doing it for the Nobel Prize. But at the same time, how can one explain his desire to establish control over the Fed or the Bureau of Statistics? And most importantly, why? Foreign investors see this and lose interest in the American economy.

It should also be noted that America is becoming a country only for the wealthy. The poor will have to work 20 hours a day just to make ends meet. The America built by immigrants is essentially rejecting immigrants. It is unlikely anyone will want to move to the U.S. in the near future. Macroeconomic data are not shining with positivity either. GDP is growing, but the labor market is declining, inflation is rising, and business activity is falling. And most importantly, the current White House administration does not need a "strong" dollar. That is, if Trump has the chance to extend a hand to the drowning dollar, he is more likely to throw it a hundred-pound weight instead of a lifeline.

The average volatility of the GBP/USD pair over the past five trading days is 64 pips. For the pound/dollar pair, this is "medium-low." Therefore, on Wednesday, August 20, we expect movement within a range limited by the levels of 1.3425 and 1.3553. The long-term linear regression channel is directed upward, indicating a clear upward trend. The CCI indicator has entered the oversold area twice, warning of a resumption of the upward trend. Also, before the start of the new upward leg, several "bullish" divergences were formed.

Nearest Support Levels:

S1 – 1.3489

S2 – 1.3428

S3 – 1.3367

Nearest Resistance Levels:

R1 – 1.3550

R2 – 1.3611

R3 – 1.3672

Trading Recommendations:

The GBP/USD currency pair has completed another round of downward correction. 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 line, small shorts may be considered with a target of 1.3428, based purely on technical grounds. From time to time, the U.S. currency shows corrections, but for a trend-based strengthening, it needs real signs of the end of the global trade war.

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.