It is important to remember that government debt becomes a problem only when it is held by one party and not by others. Or when your debt is increasing while others' is decreasing. So what do we see in the pound/dollar and UK/USA relationship? In America, just like in the UK, government bond yields are rising, and each year the national debt grows as well. And this does not at all prevent U.S. President Trump from adopting "One Big, Beautiful Bill" that will increase government debt by $3 trillion over the next few years.

As we can see, the reason for the pound's crash on Tuesday seems a bit "far-fetched," since debt is also increasing in America, and government bond yields are even rising in the European Union. This is a problem for many developed countries, which continue their economic and industrial race against each other. Not only are available funds being used, but also borrowed means. No one wants to lose this race, so countries continue to build up debt.

Based on this, the U.S. dollar has the same problems as the British pound. And besides the issues related to government bonds, the dollar also faces a whole host of problems stemming from Donald Trump's policies. That's why I believe that the decline in GBP/USD (and likewise in EUR/USD) will not last long.

This week, several important reports will be released in America that could well "bring the market back to reality." Market participants may realize on Friday that they are buying the dollar, the same dollar that had been sold off almost in a panic over the past 7 months. If Friday's labor market and unemployment reports aren't enough, then the upcoming Fed meeting is just around the corner, at which there's a 90% likelihood they will decide to resume the monetary policy easing cycle. If that's not enough, no worries; Trump will always come to the dollar's rescue by introducing new tariffs or by firing another FOMC member. Therefore, I still believe that the formation of the upward trend segment will continue.

Wave structure for EUR/USD:

Based on my EUR/USD analysis, I conclude that the pair continues to build an upward trend segment. The wave structure still depends entirely on the news flow related to Trump's decisions and US foreign policy. The targets for the current trend segment could extend to the 1.25 area. Accordingly, I continue to consider buys with targets around 1.1875 (which corresponds to 161.8% Fibonacci) and higher. I assume wave 4 is complete. Therefore, now is still a good time to buy.

Wave structure for GBP/USD:

The wave pattern for GBP/USD remains unchanged. We are dealing with an upward, impulsive trend segment. Under Donald Trump, the markets may witness many more shocks and reversals that could seriously affect the wave pattern, but for now, the working scenario remains intact. The targets for the upward segment are now located around 1.4017. I currently assume that the corrective wave 4 is complete. Wave 2 in 5 may also be complete or close to completion. Accordingly, I recommend buying with a target of 1.4017.

Core Principles of My Analysis:

1. Wave structures should be simple and understandable. Complex structures are difficult to trade and often bring changes.
2. If you are uncertain about the market situation, it is better not to enter.
3. One can never be 100% certain about the direction of movement. Don't forget about protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.