04.05.202604:33 Forex Analysis & Reviews: GBP/USD Overview. Weekly Preview. Non-Farms and Geopolitics Will Determine the Dollar's Fate

The GBP/USD currency pair ended the past week lower, as Tehran and Washington have been unable to find common ground in negotiations. Official talks between the states are still not happening; however, various news agencies continue to report ongoing dialogue. On Friday, it became known that Washington rejected a new proposal from Iran, which likely did not include a clause about abandoning nuclear weapons. It is difficult to gauge the accuracy of such information, but the market occasionally reacts to it. For instance, it triggered a drop in the pair late on Friday.

Next week, geopolitics will remain at the forefront of the market. Last week again showed us that traders are currently indifferent to macroeconomic data, and central bank decisions and their plans are now easily forecastable by virtually all market participants. There are no significant reports scheduled in the UK this week, while several important reports will be released in the US. However, it is important to remember that in the current circumstances, significant events do not guarantee market movements. Over the past 2.5 months, the market has largely ignored several important reports, so the same could happen this week.

Naturally, the most significant reports will be the ISM, JOLTs, NonFarm Payrolls, and the unemployment rate. The JOLTs report on job openings made it onto this list by chance, and the ISM index for the services sector could be easily ignored. Essentially, only two reports warrant interest. In March, the NonFarm Payrolls figure was 178,000, which caused some traders to view the future with optimism. Let's remember that if the labor market fully recovers, the Federal Reserve can curb rising inflation by raising interest rates. But should we expect strong Non-Farms for April?

From our perspective, no. Official forecasts point to 73,000. In February, the Non-Farm figure was -133,000. Almost every month, the official figures for the previous month are revised downwards. Over the past year, only around 200,000 jobs were created in the American economy. The actual figure for April (whether above or below forecasts) will not change the overall picture and trend. Therefore, strong Non-Farms and low unemployment could strengthen the dollar on Friday, but the medium-term trend remains upward for the GBP/USD pair, and the overall fundamental backdrop is negative for the dollar. Only geopolitics can save the American currency, but for that to happen, the conflict in the Middle East needs to restart.

We certainly do not wish to see a new escalation of conflict, and we expect only a long-term decline in the dollar. Trump's policies suggest no other outcome. According to some experts, the dollar remains overbought and overvalued after a 17-year rise. The Fed will also be unable to extend a helping hand in the foreseeable future.

The average volatility of the GBP/USD currency pair over the last 5 trading days as of May 3 is 97 pips and is considered "average" for this pair. We expect the pair to trade within a range of 1.3477 and 1.3671 on Monday. The upper channel of the linear regression is directed downward, indicating a bearish trend. The CCI indicator has entered the overbought area and formed a "bearish" divergence, warning of a downward pullback that has already 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 continues its recovery after two "months of geopolitics." Trump's policies will continue to pressure the US economy, so we do not expect the American currency to strengthen in 2026. Therefore, long positions targeting 1.3916 and above remain relevant when the price is above the moving average. If the price is below the moving average line, shorts with targets at 1.3477 and 1.3428 can be considered based on technical grounds. In recent weeks, the British currency has recovered, and the geopolitical factor is diminishing its influence on the market.

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.