The British pound is in a similarly difficult position as the European currency. Just two weeks ago, construction of a corrective structure could have been completed, but the situation in the Middle East has changed significantly, not only in currency markets but also in financial and energy markets. As a result, the unexpected leader remains the U.S. dollar. Demand for U.S. currency is rising, not because of positive economic data or changes in trade or immigration policies. Instead, demand for U.S. currency is growing amid capital outflows from riskier currencies and assets into safer ones. However, this is not news.

In my view, the economic news background will remain secondary for the market for now, but next week, there will be important reports in the U.S. Last week, the market reacted very minimally to the labor market and unemployment reports. Consequently, if there is no escalation of the conflict in the Middle East next week, the GBP/USD instrument could begin to recover. According to the current wave analysis, this will mark the beginning of a new upward wave structure. In a week (for example), it will be clearer how events will unfold in Iran, what Donald Trump can achieve in the Middle East, and how long the conflict may last.

I would like to remind you that the market tends to react panically only in the first few days of a new conflict. After that, the usual rhythm of work and trading returns. Therefore, next week the dollar may lose its geopolitical support. Regarding the British news background, on Thursday, attention should be paid to the speech of Bank of England Governor Andrew Bailey, who traditionally speaks infrequently. On Friday, reports on GDP and industrial production will be released. The GDP will be reported for January on a monthly basis, and minimal growth of the British economy is expected, as usual. Industrial production may again decline or show slight growth. If the British pound does recover, it will likely be only on the weakening of the geopolitical influence.

Wave Pattern for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues to build an upward trend section. Trump's policies and the Federal Reserve's monetary policy remain significant factors in the long-term decline of the American currency. The targets for the current trend section may extend up to the 25th figure. At this moment, I believe the instrument remains within the global wave 5, so I expect price increases in the first half of 2026. The corrective structure a-b-c-d-e could be completed at any moment, as it has already taken a convincing form. I believe it is now prudent to identify areas and levels for new purchases, with targets around 1.2195 and 1.2367, which correspond to the 161.8% and 200.0% Fibonacci.

Wave Pattern for GBP/USD:

The wave pattern for the GBP/USD instrument appears quite clear. The global wave 5 may take on a much more extended form than it currently has. I believe the corrective wave structure will complete soon, after which the upward trend will resume. Therefore, I can now advise seeking opportunities for new purchases with targets positioned above the 39 figure. In my view, under Donald Trump, the British pound has every chance of rising to $1.45-$1.50, and the upward trend does not appear to be over.

Main Principles of My Analysis:

1. Wave structures should be simple and understandable. Complex structures are difficult to trade and often lead to changes.
2. If there is no confidence in what is happening in the market, it is better not to enter.
3. There is never 100% certainty about the direction of prices. Always remember to use protective stop-loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.