The wave pattern for GBP/USD continues to indicate the construction of a bullish impulse wave structure. The wave picture is almost identical to EUR/USD, as the only true "driver" remains the US dollar. Demand for the dollar is decreasing across the market (on a medium-term horizon), so many instruments are showing nearly identical dynamics. Currently, wave 4 is likely complete. If this is indeed the case, the instrument's rise will continue within impulse wave 5. Wave 4 may take on a five-wave structure, but this is not the most probable scenario.

It is important to keep in mind that a great deal in the currency market currently depends on Donald Trump's policies—and not just trade policy. From time to time, good news comes out of America, but the market constantly keeps in mind the overall uncertainty in the economy, Trump's conflicting decisions and statements, and the hostile, protectionist stance of the White House. Global tensions are rising and, as I mentioned, the dollar remains the main culprit. That is why it is taking all the "hits."

The GBP/USD rate declined by 150 basis points on Tuesday but managed to recover some lost ground on Wednesday. Yesterday I already mentioned that any further decline in the instrument in the near future will not lead to a change in the wave pattern. Thus, regardless of how far the pound falls, it will only complicate the corrective wave. First, wave 2 in 5 became more complex and now takes a three-wave form. In the future, wave 4 may become more complex, if demand for the pound continues to increase. Nevertheless, the upward segment of the trend is maintained, and the news background does not allow me to conclude that the upward section of the trend is complete.

I would like to note several factors that will continue to pose problems for the dollar. First: economic data, which continues to disappoint in most cases. Second: the highly probable resumption of the Fed's monetary policy easing cycle in September, regardless of the US labor market and inflation data. Third: the ongoing pressure from Donald Trump on the FOMC. If the first two factors could trigger a moderate decline in the US dollar, then as soon as the market realizes Trump will not leave the Fed alone, it will accept a simple idea—rates will be cut aggressively.

Essentially, the question can be posed as: when will Trump break the FOMC? No one knows when exactly this will happen, but I am increasingly convinced each day that it will happen. Therefore, it's just a matter of time before the Fed rate starts to decrease quickly to levels that will allow a significant acceleration of the US economy, which is currently under the pressure of tariffs.

General Conclusions

The wave picture for GBP/USD remains unchanged. We are dealing with a bullish, impulsive segment of the trend. Under Donald Trump, the markets may see many more shocks and reversals that could significantly change the wave structure, but for now, the base scenario remains intact. The targets for the bullish segment of the trend are now located around 1.4017. At this point, I assume the construction of corrective wave 4 is complete. Wave 2 in 5 may also be complete or close to completion. Therefore, I recommend buying with a target of 1.4017.

Key principles of my analysis:

1. Wave structures should be simple and clear. Complex structures are hard to trade and often lead to changes.
2. If you are not confident about the market situation, it is better not to enter.
3. One can never be 100% sure about the direction; always use protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.