The wave structure for the GBP/USD pair continues to indicate the formation of a bullish impulse wave pattern. The wave configuration closely mirrors that of EUR/USD. Until February 28, the market had been forming a clear corrective structure that left little room for doubt. However, demand for the U.S. dollar then began to decline rapidly, culminating in a trend reversal. Wave 2 of this uptrend took the form of a single wave. Inside the presumed Wave 3, sub-waves 1 and 2 have formed. Therefore, further appreciation of the British pound can be expected as part of Wave 3 within 3 — which is exactly what we're seeing.

It's important to remember that at the moment, much of what happens in the currency market depends on Donald Trump's policies. Positive news may emerge from the U.S., but the market remains focused on the overarching uncertainty in the economy, Trump's contradictory decisions, and the White House's hostile and protectionist foreign stance. As a result, the dollar needs significant effort to convert even positive news into increased demand.

On Thursday, the GBP/USD pair did not lose a single basis point despite extremely strong news flow. Once again, the market essentially ignored positive U.S. news. After all, it's not every day that a court invalidates sweeping presidential decisions involving hundreds of billions of dollars.

The U.S. Court of International Trade ruled to overturn most of Donald Trump's tariffs, citing their illegality. It's worth noting that the court did not delve into the motives behind the tariffs or their economic effects. In other words, years from now it might turn out that Trump was right and the tariffs did in fact support U.S. economic growth. But that wasn't the court's concern — and no one can predict the future. The court ruled solely on legal grounds: the president does not have unilateral authority to impose tariffs. Whether Trump was fighting illegal fentanyl trafficking or perceived trade injustice, he simply lacks the legal power to act alone.

Yet the market's reaction was quite muted. In my view, market confidence in the dollar — and in the U.S. — has been shaken, if not permanently, then for the foreseeable future. Many market participants now expect Trump to pursue every legal avenue to find a court that will overturn the repeal. Few doubt he'll succeed in doing so. In other words, few truly believe that the entire tariff saga will end so quietly and trivially. This is why demand for the U.S. dollar has barely increased, and the outlook for the upward trend remains largely unchallenged.

Key Conclusions

The wave pattern for GBP/USD has transformed. We're now dealing with a bullish impulse segment of the trend. Unfortunately, under Donald Trump, markets may face numerous shocks and reversals that won't align with any wave count or technical analysis. But for now, everything is unfolding according to the updated bullish scenario. The development of Wave 3 continues, with immediate targets at 1.3541 and 1.3714. Therefore, I continue to favor long positions, as the market shows no sign of a reversal.

At a higher wave scale, the pattern has also shifted to a bullish formation. Currently, the uptrend appears incomplete, and further upward movement is expected.

Core Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are hard to trade and often signal impending changes.
2. If you're uncertain about the market, it's better to stay out.
3. You can never be 100% certain about the direction. Always use protective Stop Loss orders.
4. Wave analysis can be combined with other forms of analysis and trading strategies.