For GBP/USD, the wave count continues to indicate the formation of an upward impulse structure. The wave pattern is almost identical to that of EUR/USD, since the only "culprit" remains the dollar. Demand for the U.S. currency is falling across the market in the medium term, leading many instruments to show nearly the same dynamics. At present, the formation of the assumed wave 5 is ongoing, within which waves 1 and 2 have already formed. The current wave structure raises no doubts.

It should be remembered that much in the currency market now depends on Donald Trump's policies—not only trade-related. From time to time, positive news does emerge from the U.S., but the market remains focused on persistent economic uncertainty, contradictory decisions and statements from Trump, and the hostile, protectionist stance of the White House. There is also concern about Fed easing, which is now supported by more than just a weak labor market.

The GBP/USD exchange rate rose by another 70 basis points on Tuesday. It might seem that the morning reports from the UK supported buyers, but I am almost certain that demand for the pound would have grown even without them. The main risk for the pound on Tuesday was a rise in unemployment. Had the indicator increased, the total rise over the past year would have been nearly 1%. During the same period, inflation doubled to nearly 4%. Higher unemployment could theoretically force the Bank of England to focus not only on price stability but also on the labor market, which is clearly "cooling" if unemployment is rising. However, the unemployment rate came in exactly as expected at 4.7%.

Other UK reports carried less weight for the market. At this stage, it does not matter much that wage growth slowed slightly compared to the previous month or that new jobless claims came in slightly above forecasts. Monetary policy at the BoE will be influenced by the "big reports" such as inflation. Even in current conditions, inflation has reached levels that are already high regardless. The current inflation rate (a new report will be released tomorrow morning) can be compared to business activity indices. For business activity, any reading below 50 is considered negative. Similarly with inflation—any reading above 3–3.5% can be considered high. Whether inflation accelerated or slowed in a given month above this barrier matters less. For the most part, the pound continues to rise on the back of U.S. dollar weakness, while UK data is a secondary supporting factor—and one that does not always work in the pound's favor.

General Conclusions

The wave pattern for GBP/USD remains unchanged. The pair is in an upward impulse segment of the trend. Under Donald Trump, markets may face many more shocks and reversals that could have a significant impact on wave counts. For now, however, the base scenario holds together, while Trump's policies remain the same. The targets for the upward trend segment are located around the 261.8% Fibonacci level. At this stage, I expect continued growth within wave 3 of 5, with a target of 1.4017.

The higher-scale wave count looks nearly perfect, even though wave 4 exceeded the high of wave 1. However, textbook-perfect wave counts exist only in theory. In practice, things are much more complicated. At present, I see no reason to consider alternative scenarios or introduce adjustments.

Key Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often change.
2. If there is no confidence in the market, it is better not to enter.
3. Absolute certainty about direction is impossible. Always use protective Stop Loss orders.
4. Wave analysis can be combined with other forms of analysis and trading strategies.