The wave pattern for GBP/USD continues to indicate the formation of an upward impulsive wave structure. The wave setup closely mirrors that of EUR/USD, as the common driving force is the U.S. dollar. Demand for the dollar is weakening across the market, which is why many instruments are showing similar dynamics. Wave 2 of the upward trend has taken the form of a single wave. The presumed Wave 3 has a strong and completed appearance, so I expect the development of a corrective wave structure.

It is important to remember that much of the current situation in the currency market depends on Donald Trump's policies—not only trade-related ones. From time to time, decent news comes out of the U.S., but the market continues to focus on economic uncertainty, Trump's contradictory decisions and statements, and the White House's hostile, protectionist stance. As a result, the dollar must work hard to convert even positive news into increased demand.

The GBP/USD rate fell by 60 basis points on Tuesday, after losing another 60 the previous day. Overall, the British currency continues to weaken despite a new escalation in the trade war. In my view, the instrument's movement, market behavior, and news background currently do not align. However, we have clearly seen a five-wave upward structure, which now calls for a corrective wave sequence. I mentioned this last week. Therefore, the wave setup currently takes precedence over the news, and the market may respond to the new tariff hikes later.

At the same time, demand for the euro is not declining—only for the British pound. I find this unusual, but not alarming. The wave patterns for both instruments suggest the formation of a downward corrective structure. For the pound, it may be slightly more pronounced and extended—nothing more.

In my opinion, all recent developments point to a likely resumption of dollar selling by market participants sooner or later. Trump continues to raise tariffs and introduce new trade restrictions to protect U.S. industries, while maintaining confrontational relations with many countries and often making unrealistic demands. Negotiations with the U.S. president remain difficult for nearly all parties involved. Today is already July 15, and there are still no new trade agreements. Trump has set a new deadline of August 1, but he's done this before—and as we can see, it hasn't led to faster negotiations.

And it likely won't, because U.S. trade partners are seeking favorable long-term agreements that will remain in effect for years. They are not particularly concerned about Trump's deadlines. In most cases, the U.S. president keeps tariffs in place even after trade deals are signed. So there's no rush—and by the sixth month of this trade war, tariffs no longer intimidate anyone. It is Trump who should be in a hurry, since the U.S. economy contracted by 0.5% in Q1, inflation is rising, and the Fed still has no plans to cut rates to support economic growth.

Summary

The wave pattern for GBP/USD remains unchanged. We are dealing with an upward impulsive trend segment. Under Donald Trump, the markets may face many more shocks and reversals, which could significantly impact the wave structure, but for now, the working scenario remains intact. The target for the upward trend lies around 1.4017, which corresponds to the 261.8% Fibonacci extension from the assumed global Wave 2. A corrective wave sequence is currently unfolding, which, according to classic wave theory, should consist of three waves.

Core Principles of My Analysis:

1. Wave structures should be simple and clear. Complex patterns are difficult to trade and often prone to change.
2. If you're unsure about what's happening in the market, it's better to stay out.
3. Absolute certainty about price direction is impossible. Always use protective Stop Loss orders.
4. Wave analysis can be combined with other forms of analysis and trading strategies.