23.02.202600:41 Forex Analysis & Reviews: British Currency. Weekly Preview

The British pound is currently as dependent on the dollar as the euro. The GBP/USD instrument has formed the same three-wave corrective structure as EUR/USD. Therefore, in both cases, we are entitled to consider it complete. If this is indeed the case, then a new upward wave set may begin to form on Monday, according to the higher-order wave analysis.

What can the British news backdrop do to help the pound? To put it briefly, nothing, as there are no economic reports scheduled for next week in the UK. All that British news could have done has already occurred this week. Key reports on unemployment and inflation have shown figures that left market participants with little choice. The unemployment rate unexpectedly increased to 5.2%, and the consumer price index slowed down to 3%. Both reports provide the Bank of England with the opportunity to ease monetary policy at the next meeting.

However, has this factor not been fully priced in by the market? Why should the pound continue to decline all the way to the BoE meeting? I remind you that I am operating from a wave analysis perspective, so I expect the formation of an upward wave set until the EUR/USD instrument breaks the 1.1746 level. There is a high correlation between the euro and the pound, so, in my opinion, when predicting the pound's movements, it is quite reasonable to rely on specific technical or wave indicators from the euro.

Consequently, both the euro and the pound should start next week powerfully and without much delay. Donald Trump has, in his own way, helped the European currencies by effectively maintaining the global trade war despite the Supreme Court's ruling. Therefore, market participants' optimism regarding the US currency should sharply decrease.

Wave Picture for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues to form an upward trend. Trump's policies and the Fed's monetary policy remain significant factors in the long-term decline of the US currency. The targets for the current segment of the trend may extend to the 25-figure mark. At this moment, I believe the instrument remains within the framework of global wave 5, so I expect an increase in quotes in the first half of 2026. The corrective structure a-b-c may be completed at any moment, as it has already taken on a convincing form. I believe it is now prudent to look for areas and levels for new purchases with targets around 1.2195 and 1.2367, corresponding to 161.8% and 200.0% on the Fibonacci.

Wave Picture for GBP/USD:

The wave picture for the GBP/USD instrument appears quite clear. The five-wave upward structure has completed its formation, but the global wave 5 may take on a much more extended form. I believe the corrective wave set is forming and may conclude soon, after which the upward trend will resume. Therefore, I would advise looking for opportunities for new purchases with targets above the 39-figure. In my opinion, under Trump, the British pound has a good chance of rising to $1.45-$1.50.

Key Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often entail changes.
2. If there is no confidence in what is happening in the market, it is better not to enter it.
3. There can never be 100% certainty in the direction of movement. Don't forget about protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.