The GBP/USD pair has already risen by 400 points amid a sharp increase in the chances of reaching a stable ceasefire between Iran and the United States. The first round of negotiations in Islamabad failed, but the market is awaiting a new round and is clearly reacting positively to falling oil prices (Brent futures have already dropped to $91), as well as the absence of new missile strikes in the Middle East.

Two main reasons for the pound's growth should be noted. The first is technical. Last week, a bullish imbalance (No. 18) was formed, and the price precisely tested it on Monday night and reacted to it. In other words, a bullish signal appeared within a bullish trend. The second reason is geopolitical. The market had sufficient time and opportunity to price in the most pessimistic scenario in the Middle East. After the failed negotiations in Islamabad, nothing changed. Oil did not reach new record highs, no new missiles were launched at Iran, and the Strait of Hormuz remains blocked. The situation did not improve, but it did not worsen either. It is also worth noting that recent bearish patterns failed to trigger a bearish move, as did the sweep of bearish liquidity (red lines on the chart).

As mentioned in previous analyses, an important and relatively rare "Three Drives Pattern" was formed, which marked the beginning of the pound's upward movement. Thus, traders received a bullish signal at the very start of the move, while the trend has remained bullish throughout.

At present, the ceasefire remains fragile, and the parties involved have not yet decided whether to continue negotiations or resume hostilities. Talks may resume this week, which is a positive factor. The Strait of Hormuz is under a dual blockade, and the Bab el-Mandeb Strait may join it, which is a negative factor. However, as of Friday, the situation has not materially changed. The Middle East situation may escalate, but it could also continue moving toward de-escalation.

The "Three Drives Pattern," marked on the chart with a triangle, enabled bulls to take control, which is already a positive sign. Yesterday, a second reaction to imbalance No. 16 was observed, but second reactions are usually weaker than the first. The pair also swept liquidity from the February 26 high, and together these factors could trigger a corrective pullback. On the downside, the only notable bullish pattern is imbalance No. 18, which has already produced a price reaction. A new imbalance (No. 19) has also formed, which may generate a buy signal today or on Monday. Any bullish pause may be short-lived—especially if news emerges about renewed negotiations and progress between the Iranian and U.S. delegations.

There was no economic news flow on Friday, and the day before traders ignored new reports, this time from the UK. This suggests that economic data is currently not a key driver for the market. Technical signals are present, and new Iran–U.S. negotiations are expected. This is sufficient for traders to make decisions.

In the United States, the overall background suggests that, in the long term, the dollar is more likely to weaken. Even the conflict between Iran and the U.S. does little to change this. The outlook for the dollar remains challenging: the U.S. labor market is weakening, the economy is approaching recession, the Federal Reserve—unlike the ECB and the Bank of England—is not expected to tighten monetary policy in 2026, and several large protests against Donald Trump have taken place across the country. From an economic standpoint, there are currently no clear reasons to expect sustained dollar growth.

A bearish trend would require a strong and stable positive backdrop for the dollar, which is difficult to expect under Donald Trump. Geopolitics supported the dollar for two months, but this support is now fading. While it cannot be ruled out that the dollar may strengthen again due to geopolitical factors, there are currently no strong reasons to expect this.

Economic Calendar for the U.S. and the UK:

On April 20, the economic calendar contains no events. The news background is not expected to influence market sentiment on Monday.

GBP/USD Forecast and Trading Advice:

The long-term outlook for the pound remains bullish. The "Three Drives Pattern" signaled potential growth, followed by a bullish imbalance and a buy signal. The price has swept liquidity from bullish swings on March 10 and 23, as well as from the February 26 swing, but bears have not taken control—another positive sign for the pound.

Under current conditions, despite geopolitical uncertainty, the upward movement is likely to continue. The euro is also likely to keep rising. The target for the pound is the 2026 high. A reaction to imbalance No. 16 may trigger a corrective pullback, while reactions to imbalances No. 18 and No. 19 may provide new buying signals for traders.