12.01.202601:15 Analisis Forex & Kajian: British Pound. Preview of the week

The British currency enjoyed greater market favor during the holiday weeks and avoided a sharp decline. I cannot say that the news backdrop for the euro and the pound differed radically over the past three weeks, but still, demand for the euro has been falling for three weeks, while for the pound sterling, only for a few days. Therefore, there are differences in how the market perceives news and events. Nevertheless, the wave counts for EUR/USD and GBP/USD are almost identical. Only minor differences are present. In both cases, three-wave upward structures formed, which may mark the beginning of a new, long-lasting global uptrend or be part of the corrective structure in the second half of 2025. In any case, in the near term, the corrective wave (waves) may continue to build, and the news backdrop is not currently being fully perceived by the market.

In the UK next week, there will be slightly more economic releases than in the current week. And this week, there were none. Only on Thursday will reports on November's GDP and industrial production be released. I remind you that GDP reports quite rarely deviate from market expectations by more than 0.1%, and, consequently, rarely provoke a market reaction. Monthly reports are much less important to traders than quarterly and annual ones. Industrial production in Britain may increase by 0.1% month-on-month, but the market's focus now is solely on Donald Trump. At least, I did not notice a strong market reaction last week to the ADP reports, JOLTS, ISM indices, Nonfarm Payrolls, and the unemployment rate, which determine the fate of the Federal Reserve's monetary policy. Market activity after the holidays remains fairly low.

Wave picture for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues to form an upward trend. Donald Trump's policy and the Federal Reserve's monetary policy remain significant factors in the long-term decline of the U.S. currency. The targets of the current trend segment may extend to the 25th figure. The current upward wave set may be complete, so the instrument faces a near-term decline. The trend segment that began on November 5 may still take on a five-wave appearance, but, right now, it is a corrective wave.

Wave picture for GBP/USD:

The wave picture of GBP/USD has changed. The downward corrective structure a-b-c-d-e in C of 4 appears to be complete, as does the entire wave 4. If this is indeed the case, I expect the main trend segment to resume its development with initial targets around the 38 and 40 figures.

In the short term, I expected the formation of wave 3 or c with targets located near the marks 1.3280 and 1.3360, which correspond to 76.4% and 61.8% on the Fibonacci scale. These targets have been reached. Wave 3 or C has presumably completed its formation, so in the near term, a downward wave or a set of waves may be observed.

Main principles of my analysis:

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