The GBP/USD currency pair also showed no interesting moves on Monday, as there were no important events or publications in the UK or the US. As we warned, it was a "boring Monday." However, for the US dollar, this calm period is advantageous — a time when it can feel relatively secure. The US dollar continues to take hits from many directions, mostly from the White House. Neither macro data (with rare exceptions), nor fundamentals, nor Federal Reserve policy, nor geopolitics meaningfully support the US currency. Again: if not for Trump's war with Iran, we would not have seen any dollar strength in 2026 beyond corrections. And even the rise we did see is essentially a correction, as visible on the weekly timeframe.

Next week the Fed and the Bank of England will meet, and traders are already preparing. Official forecasts currently imply the key rate will be raised to 4%. We remain highly skeptical of a hawkish outcome, though we do not dismiss the possibility. Our view is that there are insufficient macroeconomic grounds for Fed tightening; Kevin Warsh is known as a Trump protege who consistently calls for easing; and several FOMC members said last week that inflation continues to slow, so a rate hike is unnecessary.

Thus, we still do not believe the Fed will raise rates in September — and even if it does, the hawkish scenario was already priced in back in June when Warsh first announced his intent to combat high inflation. Three months have passed since then, and inflation remains unmanaged. Moreover, Trump threatens the Fed with trade sanctions against countries with trade surpluses with the US. It is hard to see how Trump can credibly blackmail the Fed, which is independent of trade policy, but the threat exists.

What if the Fed does raise the rate? In our opinion, that could spell the end of Warsh's quiet tenure at the Fed. White House criticism would intensify beyond what Powell faced, and Trump could quickly seek grounds for Warsh's removal via legal or political means. We therefore do not expect Warsh to raise the key rate calmly simply because inflation requires it. At the last meeting, only three committee members voted for tightening, and inflation then was higher than it is now.

Average volatility of the GBP/USD pair over the last 5 trading days is 55 pips. For the pound/dollar, this is "low." On Tuesday, September 8, we therefore expect movement inside the range bounded by 1.3490 and 1.3601. The major linear regression channel has turned up, indicating an uptrend. The CCI entered oversold territory, warning of a possible end to the correction.

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 pair retains an upward trend. Trump's policies will continue pressuring the US economy, so we do not expect long-term dollar strength. 2026 has been positive for the dollar due to geopolitics, but every story ends. On the weekly TF, the pair remains flat between 1.3150 and 1.3780 within a four-year uptrend, allowing for expectations of continued pound gains in the medium term. Long positions with targets of 1.3601 and 1.3672 can be considered when price is above the moving average. A price below the moving average allows short trades with targets at 1.3489 and 1.3428.

Explanations for Illustrations:

Regression channels help determine the current trend. If both are directed in the same direction, it means the trend is currently strong;

The moving average line (settings 20,0, smoothed) defines the short-term trend and the direction in which trading should be conducted at present;

Murray levels are target levels for moves and corrections;

Volatility levels (red lines) are the probable price channel within which the pair will spend the next 24 hours based on current volatility indicators;

The CCI indicator – its entry into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal in the opposite direction is approaching.