08.05.202604:21 Forex Analysis & Reviews: GBP/USD Overview. May 8: Is There a Chance for a Deal Between Iran and the US?

The GBP/USD currency pair also traded quite calmly on Thursday, remaining near its local highs. The upward trend persists even on the 4-hour timeframe, despite the lack of clear signs of a resolution to the conflict between Iran and the US. Information continues to pour in through various channels about the progress of negotiations between Tehran and Washington. However, much of this information consists merely of speculation and assumptions. Sources of information are rarely named, which, on the one hand, is understandable, but, on the other hand, makes it difficult to assess the truth of the insights received.

Most experts agree that the US insists on complete nuclear disarmament of Iran, a ban on uranium enrichment for at least 20 years, permanent monitoring of Iranian facilities, and the immediate unblocking of the Strait of Hormuz. Iran seeks the lifting of the blockade of its ports, the unfreezing of all its assets, the removal of all sanctions, and guarantees against future attacks. Is it reasonable to expect that the parties will reach a consensus on a number of very "sensitive" issues?

Traders should remember the following: Iran could have renounced nuclear weapons multiple times over the past 50 years, but has not done so. The US and other countries could have lifted sanctions on Iran multiple times (even when the previous nuclear deal was in effect), but did not. The Strait of Hormuz is essential primarily for Iran and the world, not the US. And who will provide guarantees against future attacks is another very interesting question. Thus, we believe an agreement may be reached, but it will be fragile, much like the current ceasefire.

In other words, Iran and the US will seek to sign an agreement to end a war that neither Tehran nor Washington wants. However, each side will simultaneously strive to subtly violate the agreement or to accuse the other side of breaching it. We do not believe that Iran will agree to export all of its uranium beyond its territory and abandon its nuclear developments. We do not believe that American or international experts will be able to continually monitor and inspect all of Iran's facilities (most of which are underground) where uranium could theoretically be enriched or ballistic missiles produced. Simply put, while the parties may agree on paper, implementing such an agreement will be challenging for both Iran and the US.

If the agreement is difficult to implement in practice, its collapse can be expected at any time. This means that peace in the Middle East will inherently be temporary. Of course, a temporary peace is better than a new war, but we want to emphasize that long-term peace in the Middle East, in the current realities, is practically utopian. If a deal is signed, the US dollar will continue to decline. We still see no reason for its growth in 2026, even in the absence of a loosening of the Fed's monetary policy.

The average volatility of the GBP/USD pair over the last five trading days is 80 pips, which is considered "average" for this pair. Therefore, on Friday, May 8, we expect movements within a range bounded by levels 1.3516 and 1.3676. The upper linear regression channel has flattened, indicating a change in trend to an upward direction. The CCI indicator has entered overbought territory and formed a "bearish" divergence, signaling a downward correction that has already been completed.

Nearest Support Levels:

S1 – 1.3550

S2 – 1.3489

S3 – 1.3428

Nearest Resistance Levels:

R1 – 1.3611

R2 – 1.3672

R3 – 1.3733

Trading Recommendations:

The GBP/USD currency pair is recovering after two months of geopolitical tension. Donald Trump's policies will continue to put pressure on the US economy, so we do not expect the US currency to grow in 2026. Therefore, long positions with a target of 1.3916 and above remain relevant when the price is above the moving average. If the price is below the moving average line, short positions can be considered with targets at 1.3516 and 1.3489 based on technical analysis. In recent weeks, the British currency has recovered, while the influence of geopolitical factors on the market is diminishing.

Explanations for the 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) determines the short-term trend and the direction in which trading should be conducted.
• Murray levels – target levels for movements and corrections.
• Volatility levels (red lines) – indicate the probable price channel in which the pair will spend the upcoming day, based on current volatility metrics.
• CCI Indicator – its entry into the overbought (above +250) or oversold (below -250) areas signals that a trend reversal is approaching in the opposite direction.