In my previous review, I discussed Morgan Stanley's stance on the prospects of the British pound and noted that, in my opinion, "dollar factors" will be of paramount importance. In other words, the fate of the GBP/USD instrument (as well as, for example, EUR/USD) will largely depend on the American news background, Donald Trump's policies, and the Federal Reserve's monetary policy rather than on the state of the UK economy and its political course. If the dollar falls, then the euro and pound will rise, regardless of the news from the European Union and the UK. It is worth noting that in the first half of 2025, the euro rose significantly despite the European Central Bank and the Fed easing monetary policy and keeping interest rates unchanged. This was because the dollar was being sold off due to Trump's policies, while European news had little impact on market participants.

Credit Agricole agrees that the dollar may face another crash in the future. They note low volatility in the market over the past few months; however, they believe this period could be the beginning of a new wave of dollar decline. Economists at Credit Agricole believe that a reduction in the Fed's interest rates at the end of 2025 and throughout 2026 will exert pressure on the American currency, and the dollar can only rely on positive economic data.

I want to remind you that Trump aims to boost the American economy to unprecedented levels, which will require a trade war, reduced spending, increased revenues, and low interest rates. If the U.S. economy grows rapidly, this could support the U.S. currency in the long term. However, in recent months, there has been a reverse trend. The economy is slowing, many economists are again talking about a recession, the trade war has not yielded significant results, business activity is declining, industrial production is growing at weak rates, inflation is accelerating, and the labor market is "cooling" with an increasing unemployment rate. Therefore, the market currently finds it difficult to justify buying the dollar for the long term, as prospects are quite cloudy. Credit Agricole also believes that a change in the Fed chair is a "bearish" factor for the dollar, and the new FOMC president will fully share Trump's views on the economy.

Wave Picture for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues to build an upward trend segment. The market has paused over the last few months, but the policies of Donald Trump and the Federal Reserve remain significant factors in the future decline of the U.S. currency. The goals of the current trend segment could reach up to the 25-figure mark. At this moment, the building of an upward wave sequence may continue. I expect that from the current positions, the third wave of this set will continue to develop, which could manifest as either 'c' or '3'. At this point, I remain bullish with targets in the range of 1.1670 to 1.1720.

Wave Picture for GBP/USD:

The wave picture for the GBP/USD instrument has changed. We continue to deal with an upward, impulsive segment of the trend, but its internal wave structure has become complex. The downward corrective structure a-b-c-d-e in 'c' at 4 appears to be quite complete. If this is indeed the case, I expect the main trend segment to resume building with initial targets around the 38 and 40 figures. In the short term, one can expect the formation of wave '3' or 'c' with targets located around the marks of 1.3280 and 1.3360, which correspond to 76.4% and 61.8% Fibonacci levels. These are minimum targets in case the market decides to complicate wave 4 even further.

Key Principles of My Analysis:

1. Wave structures should be simple and understandable. Complex structures are difficult to play 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 can be no absolute certainty about market direction. Don't forget to use protective stop-loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.