Top.Mail.Ru
empty
05.05.2025 12:51 AM
British Pound: Weekly Preview

This image is no longer relevant

Recent reviews for both instruments have become predictable and even somewhat dull. The entire set of factors capable of influencing market sentiment and instrument movement boils down to the President of the United States, Donald Trump. As a result, in every analysis, I am compelled to talk only about the U.S. president—even when he makes no statements, takes no action, and plays golf at his private golf club. We're living in unusual times when Trump playing golf carries more weight for the market than the Nonfarm Payrolls report.

The last news events the market reacted to were reports about the possible dismissal of Jerome Powell, followed the next day by news of his "pardon." That was when the euro and the British pound reached their latest peaks and rolled back downward. Since then, both instruments have traded weakly with low movement, and market activity has declined. So, the new week's news backdrop will depend again on Trump's decisions.

In the UK, I would highlight only one event: the Bank of England's meeting. The British central bank had been holding a pause for some time but now appears ready to initiate a new round of monetary policy easing. Inflation has slowed in recent months, so the time has come to cut the interest rate. However, the market seems to view this as a routine event. I certainly do not expect a sharp drop in demand for the pound. In recent months, the market has had reasons to reduce demand for the pound or increase demand for the dollar, but again, the news backdrop is often one-sidedly priced in.

Based on the above, the BoE meeting remains an important event, but I do not expect a strong market reaction. I also do not expect a sharp drop in the pound, which contradicts the updated wave structure. Once again, Trump's rhetoric will matter more than the BoE or FOMC meetings.

This image is no longer relevant

Wave Structure for EUR/USD:

Based on the conducted analysis of EUR/USD, I conclude that the instrument is continuing to build a new bullish wave cycle. In the near term, the wave pattern will entirely depend on the position and actions of the U.S. President. This must be kept in mind at all times. Based purely on the wave count, I expected three corrective waves to form within wave 2. However, wave 2 has already ended and took the shape of a single wave. Wave 3 of the upward trend has begun, and its targets may extend to the 1.25 level. Reaching these targets will depend solely on Trump. A corrective wave may form in the short term, but further growth is expected.

This image is no longer relevant

Wave Structure for GBP/USD:

The wave structure of GBP/USD has evolved. We are now dealing with a bullish, impulsive wave segment. Unfortunately, with Donald Trump, markets may face many more shocks and reversals contradicting wave structures and technical analysis. The assumed wave 2 is complete, as prices have broken through the peak of wave 1. Therefore, we should expect the formation of upward wave 3, with immediate targets at 1.3541 and 1.3714. It would be ideal to see a corrective sub-wave 2 within wave 3—but for that to happen, the dollar must strengthen, and for that, someone has to buy it.

Key Principles of My Analysis:

  1. Wave structures should be simple and clear. Complex patterns are hard to trade and often lead to revisions.
  2. If you're uncertain about what's happening in the market, it's better to stay out.
  3. One can never be 100% certain of the market direction. Always use protective Stop Loss orders.
  4. Wave analysis can and should be combined with other types of analysis and trading strategies.
Chin Zhao,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

USD/JPY. Analysis and Forecast

The USD/JPY pair is holding above the key 144.00 level amid continued weakness in the U.S. dollar. Strong household spending data released today in Japan has strengthened expectations

Irina Yanina 18:12 2025-07-04 UTC+2

NZD/USD. Analysis and Forecast

The NZD/USD currency pair is recovering after bouncing from the 0.6030 level, which marks a weekly low, and is attempting to gain further positive momentum. This suggests a break

Irina Yanina 18:08 2025-07-04 UTC+2

USD/CAD. Analysis and Forecast

On Friday, the USD/CAD pair remains near a three-week low, trading below the key 1.3600 level. The U.S. dollar is struggling to extend its gains following yesterday's stronger-than-expected Nonfarm Payrolls

Irina Yanina 17:59 2025-07-04 UTC+2

The Market Celebrates a Victory

Financial markets responded positively to the release of U.S. employment statistics for June. Payrolls rose by 143,000, exceeding Bloomberg analysts' forecasts. April and May figures were revised upward

Marek Petkovich 10:15 2025-07-04 UTC+2

Next Week May Begin on a Positive Note for the Markets (Possible Resumption of Growth in #SPX and #NDX)

The U.S. labor market data, published by the Department of Labor, instilled cautious optimism among investors, extending the rally in U.S. equity markets, supporting the dollar, and weakening gold prices

Pati Gani 10:09 2025-07-04 UTC+2

The Market is Preparing for Another Shock

Just yesterday, U.S. President Donald Trump announced that his administration would begin sending letters to trade partners on Friday, outlining unilateral tariff rates that, according to him, countries will

Jakub Novak 09:55 2025-07-04 UTC+2

Strong U.S. Employment Report Exceeds All Expectations

The U.S. dollar surged against a range of risk assets as the key figures in June's employment report convinced the Federal Reserve that there is no need to lower interest

Jakub Novak 09:49 2025-07-04 UTC+2

What to Pay Attention to on July 4? A Breakdown of Fundamental Events for Beginners

No macroeconomic reports are scheduled for Friday. As previously mentioned, today is a public holiday in the United States, known as Independence Day. All banks and stock exchanges will

Paolo Greco 07:59 2025-07-04 UTC+2

GBP/USD Overview – July 4: Reeves Cried — Did the Pound Collapse?

The GBP/USD currency pair also traded fairly calmly throughout Thursday until the start of the U.S. trading session. Recall that a day earlier, the British currency had plummeted by nearly

Paolo Greco 03:56 2025-07-04 UTC+2

EUR/USD Overview – July 4: Trump's Third Trade Deal Didn't Help the Dollar Either

The EUR/USD currency pair traded very calmly throughout Thursday, until unemployment and labor market reports were released in the United States. However, we will discuss those reports in other articles

Paolo Greco 03:56 2025-07-04 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.