The GBP/USD currency pair also continued its upward movement on Tuesday, with no local factors driving it. The UK calendar is empty, and only a weekly ADP report was released in the US. Meanwhile, the market has shifted its attention from Greenland to Canada. Donald Trump has promised to impose 100% tariffs for... well, for what exactly? The US president accused Ottawa of wanting to become a "transit hub" for Chinese goods into the US. Trump dislikes that Canada aims to reach certain trade agreements with China to facilitate trade between the two countries. Therefore, the US leader has mentioned an alleged free trade agreement, which, according to Canadian Prime Minister Mark Carney, does not exist and is not planned.

Once again, we hear the American president make statements that completely contradict reality. Once again, the market is left guessing what the true reason for Trump's latest act of aggression against his neighbor is. In our view, all these questions are quite simple and can be answered without much difficulty.

Trump wants the whole world to live as he believes is right. If you want to trade with someone, you must ask Trump for permission. If the regime of a neighboring country does not satisfy Trump, then prepare for a military coup. If the Chinese economy is growing, Trump gets anxious, as about 50% of his actions are aimed at suppressing China's economic activity. Simultaneously, Trump loves money and aims to extract as much as possible from partner countries. Indeed, why not grab extra cash for the budget if, for example, the European Union is willing to pay those sums without much resistance? Other countries in the world are also ready to give Trump what he wants as long as their access to the American market, from which they derive their sustenance, is not blocked. And of course, there is NATO.

Trump began his second term with threats to leave NATO, and European countries understand very well that they will be left defenseless in this case. Building a new military alliance would take years and tens of billions of euros. Therefore, it is much easier and cheaper to negotiate with Trump now than to create new alliances and think about how to protect themselves later.

The US president skillfully plays the cards he has on hand: the wealthy American market and NATO. Thus, Trump wants nothing specific from Canada. He wants everything at once: for Canada to become the 51st state of the US, for Canada not to trade with China, for Canada to pay tariffs, and for Canada to worship the US and Trump personally. That's all there is to it.

The average volatility of the GBP/USD pair over the last five trading days amounts to 105 pips, which is considered "average." On January 28, we expect movement within the range limited by the levels of 1.3660 and 1.3870. The upper linear regression channel points upward, indicating a trend recovery. The CCI indicator has entered overbought territory six times over the past months and has formed numerous "bullish" divergences, constantly warning traders of an impending resumption of the upward trend.

Nearest Support Levels:

S1 – 1.3733

S2 – 1.3672

S3 – 1.3611

Nearest Resistance Level:

R1 – 1.3794

Trading Recommendations:

The GBP/USD currency pair is on track to resume the 2025 upward trend, and its long-term prospects remain unchanged. Trump's policies will continue to exert pressure on the US economy, so we do not expect the US currency to grow in 2026. Even its status as a "reserve currency" no longer matters for traders. Therefore, long positions with targets at 1.3794 and 1.3870 remain relevant for the near future as long as the price is above the moving average. If the price is below the moving average line, small shorts can be considered with a target at 1.3489 based on technical (correction) grounds. From time to time, the US currency shows corrections (in a global sense), but for trend growth, it requires global positive factors.

Explanations for the Illustrations:

• Linear regression channels help determine the current trend. If both are directed in one way, 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 currently be conducted;
• Murray levels are target levels for movements and corrections;
• Volatility levels (red lines) indicate the probable price channel in which the pair will operate for the next day, based on current volatility indicators;
• The CCI indicator entering the oversold area (below -250) or the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.