The wave pattern for GBP/USD continues to indicate the formation of a bullish impulse wave pattern. The wave picture is nearly identical to that of EUR/USD because the sole factor driving both is the U.S. dollar. Demand for the dollar is weakening across the market, so many instruments show similar behavior. Wave 2 of the upward trend segment has taken the form of a single wave. Within the assumed wave 3, waves 1, 2, 3, 4, and presumably 5 have formed. Therefore, this wave set is complete, and the market is now shifting to the construction of a corrective wave structure.

It's important to remember that currently, a great deal in the currency market depends on Donald Trump's policies — and not just trade-related ones. From time to time, the U.S. produces decent economic news, but the market is constantly focused on the uncertainty in the economy, Trump's contradictory decisions and statements, and the White House's hostile and protectionist foreign posture. As a result, the dollar must work very hard to convert even positive news into demand.

The GBP/USD rate also declined slightly throughout the day, but market participants quickly recovered. With the opening of the U.S. session, demand for the dollar subsided. Based on this, I question whether the market has actually responded positively to the latest news about tariffs. Let me remind you that Donald Trump plans to start sending out "warning letters" with new tariff rates that will take effect on August 1. Scott Bessent stated today that several trade deals are set to be signed soon. Over the weekend, Trump again threatened the European Union with increased tariffs. Trump is also threatening BRICS countries with an additional 10% tariff.

At first glance, these four reports don't form a coherent or positive narrative for the dollar. And that's exactly the point — Trump gives with one hand and takes with the other. On one side, he speaks of trade deals; on the other, he threatens new or higher tariffs. So what kind of optimism could the market have about the trade war on Monday?

I believe the U.S. dollar is strengthening slowly because market participants lack a clear rationale for buying it. The wave pattern pushes EUR/USD downward, but that means opening short positions — in the middle of a strong bullish trend and without sufficient news support. Last week, the market had far more reasons to buy the dollar, yet chose not to engage in unnecessary moves.

Based on this, I do not consider the tariff news to be positive. I don't believe the trade war is close to de-escalation, nor do I believe the dollar's suffering is about to end. Even if one trade war ends (and no one knows when that will be), Trump will likely start another — for example, against BRICS countries. Of course, I don't believe the dollar will fall non-stop for the next 3.5 years. But what's the point of buying the dollar if you're confident the bullish trend will continue? If the wave picture starts to change significantly, then alternative scenarios can be considered. For now, the picture remains unchanged.

General Conclusions

The wave pattern of the GBP/USD pair remains unchanged. We are dealing with an upward impulse segment of the trend. Under Donald Trump, markets may face many more shocks and reversals that could significantly impact the wave picture. But for now, the working scenario remains intact. The targets of the upward trend segment are now around 1.4017, which corresponds to the 261.8% Fibonacci level of the presumed global wave 2. A corrective wave set has likely just begun. If that's true, then the dollar might catch a short break, and new buying opportunities should be considered later. However, given the market sentiment and news background, this correction could end quickly.

Core principles of my analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often lead to changes.
2. If you're not confident in what's happening in the market, it's better to stay out.
3. One can never be 100% certain about the market direction. Always use Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.