27.03.202621:13 Forex Analysis & Reviews: GBP/USD. Smart Money. Market remains unstable

The GBP/USD pair made another reversal in favor of the U.S. dollar as soon as oil prices started rising again and the situation in the Middle East moved closer to a new escalation. Despite the fact that Donald Trump has already twice postponed the deadline for strikes on Iran's energy sector and speaks almost daily about negotiations with the "right people" in Iran, Iran continues to block the Strait of Hormuz, continues attacking tankers attempting to pass through it, and shows a complete unwillingness to negotiate with Washington. As a result, under current conditions, traders simply do not believe Trump and instead trust official statements from Tehran. This is why oil prices have risen again this week, while the U.S. dollar strengthened on four out of five days.

Washington, to be fair, demonstrates a desire to end the war—but on its own terms and in its own style. In other words, presenting it as if the opponent is begging for peace while Washington is graciously willing to agree. From the outside, it looks like this: let's end the war that we started—here is a list of ultimatums. Iran understands what such a "Trump-style truce" implies and simply refuses any negotiations, despite offers to lift sanctions in exchange for abandoning nuclear weapons and development. Tehran is prepared to continue blocking the Strait of Hormuz, and this is currently the most important factor for all markets. Thus, the geopolitical backdrop remains more negative than positive. Therefore, any growth in the pound is limited. Meanwhile, the economic backdrop that could support the British currency does not attract traders' attention.

The probability of a new decline in both pairs remains fairly high, and all discussions about a possible bullish advance at the moment are merely assumptions without confirmation or evidence. At present, there are no patterns at all—neither new nor old. The last two imbalances can be considered completed, invalidated, and forgotten. We have also not seen any significant liquidity sweeps recently. Therefore, new patterns and liquidity sweeps are needed in any case.

The bullish trend in the pound remains intact. As long as it holds (above the 1.3012 level), more attention should be paid to bullish signals. However, there are currently no bullish patterns or signals, and geopolitics continues to hang like a "sword of Damocles" over the euro and the pound.

The news background on Friday once again failed to attract traders' interest. In the UK, a retail sales report was released today, which came in slightly better than expected. However, under pressure from worsening geopolitics, bears returned to the market today.

In the United States, the overall information backdrop suggests that, in the long term, nothing but a decline in the dollar should be expected. Even the war between Iran and the U.S. changes little. The situation for the U.S. dollar remains quite difficult in the long term and positive only in the short term. U.S. labor market data continues to disappoint. Trump's military actions, threats toward Denmark, Mexico, Cuba, Colombia, EU countries, Canada, and South Korea, the criminal case against Jerome Powell, government shutdowns, the scandal involving U.S. elites in the Epstein case, a possible impeachment of Trump by the end of the year, and likely Republican losses in upcoming elections all contribute to the broader picture of political and structural crisis in the U.S. In my view, bulls have every reason to resume their advance in 2026, but at present, traders' attention is entirely focused on geopolitics and the energy crisis.

A bearish trend would require a strong and stable positive background for the U.S. dollar, which is difficult to expect under Donald Trump. So far, geopolitics has supported the dollar for more than a month, but this support will begin to fade as soon as the Middle East conflict starts to be resolved. When that will happen is unclear, so it cannot be ruled out that the dollar may continue to rise for another week, a month, or even several months. If a global conflict were to escalate further, the dollar could strengthen significantly and for a prolonged period. However, I remain at least somewhat optimistic and hope this will not happen. In that case, the dollar's growth potential will remain limited by the negative developments in the Middle East.

News calendar for the U.S. and the UK:

On March 30, the economic calendar contains no notable entries. The impact of the news background on market sentiment on Monday will be absent.

GBP/USD Forecast and Trading Advice:

For the pound, the long-term outlook remains bullish, but there are currently no active bullish patterns. The decline of the pair in recent weeks has been so strong due to an unfortunate combination of circumstances. If Donald Trump had not initiated the conflict in the Middle East, we likely would not have seen such a strong rise in the dollar. I believe this decline may end as unexpectedly as it began. However, at present, the bearish move cannot yet be considered complete. All recent imbalances have been invalidated, and no new ones have formed.