09.06.202600:49 Forex Analyse & Reviews: British Pound. Weekly Preview

The British pound begins a new week on a somewhat gloomy note. Last week ended with a predicted collapse, but not due to the Nonfarm Payrolls report, rather because of the wave analysis. I mentioned earlier that single corrective waves are rare. Therefore, the GBP/USD instrument was expected to form at least a three-wave structure. The decline in quotes on Friday led to the formation of wave 3 or C. Based on all of the above, the pound may improve its position in the near future, and the European currency, which is presumably completing its downward wave set, may aid it in this.

What interesting events await us in the UK this week? Virtually nothing. Only some reports will be released on Friday that deserve attention, but even those are unlikely to affect the pound's short-term prospects or the wave structure. The British news background ranks third after geopolitics and American data, so it receives little attention. On Friday, reports on GDP and industrial production for April will be released in the UK. The values reported are likely to be weak again. Therefore, the pound cannot expect significant support.

However, it currently has a favorable wave structure and possibly even geopolitical factors, though it's hard to believe. I have frequently stated that geopolitics largely supports the U.S. dollar, but the dollar cannot rely solely on this factor to sustain market trust. Currently, Donald Trump continues to insist that an agreement with Iran is nearly achieved. Although there is no trust in the American president, according to the theory of probability, he cannot constantly make false or misleading statements. Therefore, sooner or later, Trump will be right about the conflict's resolution, and the market may occasionally listen to him. Why not now, when the wave analysis is favorable for both the euro and the pound?

Based on all of the above, geopolitics and the American news background will be significant for the GBP/USD instrument this week. The pound has chances for growth, but a successful attempt to break through the 33 figure (the low of wave 1 or A) will indicate that wave 3 or C may take a more extended form.

Wave Picture for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument remains within a bullish trend segment, while in the shorter term, it is within a downward trend segment that may already be complete. In my view, now is a good time to try to form long positions. An unsuccessful attempt to break the 1.1513 mark, which corresponds to 76.4% on the Fibonacci scale, combined with the completed appearance of the downward trend segment, suggests that the instrument will transition to building a bullish wave set with targets around the 17 figure and higher.

Wave Picture for GBP/USD:

The wave picture for the GBP/USD instrument has become clearer. Currently, the instrument has formed three downward waves, while the EUR/USD instrument has formed five. Therefore, the pound may be limited to constructing a corrective structure, and both currency pairs may begin building bullish trend segments. At this point, it is only an assumption, but a probable one. If correct, the instrument will start rising with targets around the 35 figure and above.

Key Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to play because they often require changes.
2. If there is uncertainty in the market, it is better not to enter.
3. There is no 100% certainty in the direction of movement, nor can there ever be. Do not forget about protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.