14.05.202604:00 Forex Analysis & Reviews: GBP/USD Overview. May 14. A New Political Crisis in the UK

The GBP/USD currency pair also attempted to continue its downward movement on Wednesday, but the British pound has exhausted its bearish factors, at least for the moment. Recall that on Monday and Tuesday, the situation in the Middle East had heated up again to the limit, but only verbally. Iran and the US exchanged threats once more, as another round of negotiations ended as all the previous ones had. We won't list all the points of the agreements proposed by Tehran and Washington to resolve the conflict here. The sticking point was and remains Iran's nuclear program.

Iran continues to refuse to agree to the export of all enriched uranium beyond its territory, to abandon uranium enrichment, or to halt its nuclear facilities or allow international experts access to them. In contrast, Iran's list of demands is extensive, as if its ballistic nuclear missiles are positioned about 100 km from the US coastline and could be launched at any moment. Simply put, Tehran is negotiating from a position of strength and intransigence. Perhaps this is indeed a correct stance, as negotiations with Donald Trump are simply ineffective. However, such a position from Tehran clearly does not contribute to resolving the conflict swiftly. And for those who do not remember, the US bombs Iran, and Iran bombs US allies in the region. Thus, the damage to the US from this operation is minimal.

Meanwhile, in the UK, Keir Starmer's Labour Party, which has led Parliament and the government for the first time in 15 years, suffered a crushing defeat in local elections. The Conservative Party also lost hundreds of seats in local government. The British people are tired of waiting for positive changes from the two eternally rivaling parties and have begun voting for alternative political forces. Approximately 40 parliamentarians called for Starmer to resign; however, the Prime Minister stated that he still enjoys the confidence of his party and the people of the UK. Consequently, it was not Starmer who resigned, which would have been logical and fair, but rather four ministers: Jess Phillips, Miatta Fahnbulleh, Alex Davies-Jones, and Zubir Ahmed.

It seems that another political crisis is brewing in the UK, but it is likely to evoke only yawns. Over the last 10-15 years, no Prime Minister has completed their term, and the resignation of "ordinary" ministers has become routine in Britain. The British pound reacted with a decline to this event, but it is questionable whether this was the reason for the decline, especially since there were significant geopolitical reasons for the decrease, and the EUR/USD pair exhibited the same movement, despite the British political crisis having no bearing on it.

The British pound is in the same position as the euro. A slight decline can be expected, and technical corrections are likely; overall, we believe the GBP/USD pair will only rise in 2026. Not because everything is wonderful in the UK, but because the situation in the US is simultaneously comical and tragic.

The average volatility of the GBP/USD currency pair over the last 5 trading days is 91 pips, which is considered "average" for this pair. On Thursday, May 14, we expect the pair to trade within the range defined by 1.3428 and 1.3610. The upper channel of the linear regression has turned upward, indicating a recovery of the upward trend. The CCI indicator has not generated signals recently.

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 continues its recovery after two months of geopolitical uncertainty. Donald Trump's policies will continue to exert 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 1.3489 and 1.3428 based on technical grounds. In recent weeks, the British currency has recovered, while the geopolitical factor has lost its influence on the market.

Explanations for the Illustrations:

• Linear Regression Channels help identify the current trend. If both are pointing in the same direction, it indicates a strong trend.
• The Moving Average Line (settings 20,0, smoothed) indicates the short-term trend and the direction in which trading should currently proceed.
• Murray Levels serve as target levels for movements and corrections.
• Volatility Levels (red lines) indicate the likely price channel in which the pair will trade over the coming days, based on current volatility metrics.
• CCI Indicator: Its entry into the oversold area (below -250) or the overbought area (above +250) signifies that a trend reversal in the opposite direction is approaching.