The wave structure for GBP/USD continues to indicate the formation of a bullish impulsive wave pattern. The wave setup is almost identical to that of EUR/USD. Until February 28, we observed the development of a convincing corrective structure that left little doubt. However, demand for the U.S. dollar then began to decline rapidly, resulting in a trend reversal to the upside. Wave 2 of the new trend took the form of a single wave. Inside the presumed Wave 3, Waves 1 and 2 have already formed. Therefore, we can now expect a new bullish movement from the pound as part of Wave 3 of 3, which is currently unfolding.

It's important to remember that a great deal in the currency market currently depends on Donald Trump's policies. Even positive news from the U.S. is overshadowed by persistent uncertainty, contradictory decisions, and the protectionist and confrontational stance of the White House. As a result, the dollar struggles to convert even good news into meaningful market demand.

On Tuesday, GBP/USD declined by a mere 15 basis points by the beginning of the U.S. session—while the euro, by comparison, had fallen by 40. The market continues to signal its reluctance to even take profits on long positions. This implies continued belief in the pair's upside. A successful attempt to break through the 1.3514 level—aligned with the 161.8% Fibonacci extension—opens up new opportunities for buyers.

The news backdrop continues to favor the pound, despite the limited positive developments for the dollar. However, the market does not treat any of the dollar's positives as genuine, largely due to the persistent "Trump factor," which continues to negate much of what's still working in the U.S. economy.

One of the few positive points for the dollar remains the Federal Reserve's stance on monetary policy. The FOMC stands firm: first assess how tariffs impact the data, then decide on rate adjustments. As of now, it's not even clear what the final tariff structure in the U.S. will be. This uncertainty prevents both the market and the Fed from projecting inflation or GDP with confidence—and therefore, from making rate decisions. As a result, interest rates will remain unchanged until more clarity is achieved.

For the dollar, it is indeed fortunate that the Fed is not conducting new rounds of policy easing. If the Fed were also cutting rates at this point, it's hard to imagine how low the U.S. dollar would have fallen. In this sense, the FOMC is the dollar's only savior. The Fed can't pull the dollar completely out of the water—but it is preventing it from sinking entirely.

General Conclusions

The wave pattern for GBP/USD has transformed. We are now dealing with a bullish impulsive trend segment. Unfortunately, with Donald Trump's influence, markets may continue to experience a series of shocks and trend reversals that do not align with wave structures or technical analysis—but for now, everything is unfolding according to the updated wave scenario. Wave 3 is still being built, with immediate targets at 1.3541 and 1.3714. I continue to favor buy positions, as the market shows no signs of reversing the trend just yet.

In the higher time frame, the wave structure has also changed. We can now assume that a bullish segment of the trend is forming, though at this stage it does not yet appear complete or mature. For now, further upside remains the most likely scenario.

My Core Analytical Principles:

1. Wave structures should be simple and clear. Complex patterns are hard to trade and often subject to change.
2. If you're unsure about the market situation, it's better to stay out.
3. There can never be 100% certainty in market direction. Always use protective stop-loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.