The wave pattern for the GBP/USD pair continues to indicate the formation of a bullish impulse wave structure. The wave picture is nearly identical to that of EUR/USD, as the U.S. dollar remains the central player in the market. Demand for the dollar is declining across the board, leading to similar dynamics across various instruments. Wave 2 of the bullish trend segment took the form of a single wave. The assumed Wave 3 has taken a clear and completed shape, so I expect the formation of a corrective structure next.

It's important to remember that the current state of the currency market is heavily influenced by Donald Trump's policies—not just trade-related ones. The U.S. occasionally reports decent economic data, but the market remains burdened by ongoing uncertainty, contradictory decisions and statements from Trump, and the White House's hostile, protectionist stance on foreign policy. As a result, the dollar has to "work hard" to convert even good news into increased market demand.

The GBP/USD rate fell by 160 basis points last week and lost about another 20 points on Monday. In my view, this move cannot be called fundamentally justified, as there were virtually no major economic releases this week. The headlines were once again dominated by Donald Trump, who criticized Jerome Powell, demanded that the Fed cut rates by at least 3%, raised trade tariffs for more than two dozen countries, and imposed new duties on imports of copper and pharmaceuticals. All of these developments could have potentially lowered demand for the U.S. dollar. However, as I previously warned, the wave pattern has finally shifted in favor of the dollar and GBP/USD sellers.

Today it was reported that the U.S. budget showed a surplus for the first time since 2017. This means that the U.S. took in more revenue than it spent. According to the U.S. Department of the Treasury, this surplus was made possible thanks to Trump's tariffs. However, I would note that the trade balance itself has not turned surplus due to these tariffs. The most recent official report from the U.S. Census Bureau on imports, exports, and the trade balance, published on July 3, covered May. The next report, covering June—where the surplus is supposedly seen—will be released on August 5. The forecast for that report is a deficit of 51 billion dollars.

It should also be noted that imports to the U.S. in April and May fell sharply—by around 70 billion dollars compared to March (which stood at 420 billion). Therefore, achieving a trade surplus was easier than ever, simply due to the drop in import volumes. Based on this, even if the world sees the first U.S. trade surplus in 8 years in June, it will be a one-off occurrence, even with high import tariffs in place.

General Conclusions

The wave pattern for GBP/USD remains unchanged. We are still in the midst of a bullish impulse trend segment. Under Donald Trump's presidency, the markets may face numerous shocks and reversals, which could significantly affect the wave structure, but for now, the main working scenario remains intact. The targets for the bullish trend segment are now located around the 1.4017 level, which corresponds to 261.8% of the Fibonacci extension from the assumed global Wave 2. A corrective wave sequence has now begun, and traditionally, it should consist of three waves.

Key Principles of My Analysis:

1. Wave structures should be simple and clear. Complex patterns are harder to trade and often change.
2. If you're uncertain about the market situation, it's better to stay out.
3. Absolute certainty in price direction is impossible. Always use protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.