See also
06.11.2025 12:51 AM
Realizing that the situation was becoming a stalemate and that its resolution could cost many their positions in Parliament, Reeves decided to address the British people, urging them to support her proposal to raise taxes. How is this likely to be perceived by the British public? One thing was promised, then the government failed in its duties, and now the British public is expected to pay for the incompetence of the current politicians out of their own pockets. It's worth noting that the UK's standard of living has decreased following Brexit, while the cost of living has risen. Tax increases represent another blow to households. Unsurprisingly, the British pound came under additional pressure immediately thereafter.
Reeves did not miss the opportunity to place all the blame on the Conservatives, stating that the previous government was responsible for excessive spending and Brexit. It's important to remember that not long ago, Reeves doubted the wisdom of the UK leaving the European Union, considering it a mistake for her country. However, shifting blame and responsibility to others has become a common practice for many democratic countries where ruling parties change relatively frequently. For instance, in the U.S., Donald Trump blames the Democrats for all sins at every available opportunity.
Reeves also employed another excuse that "changes everything" – "the situation has changed." She noted that since 2024, when the Labour Party came to power, much has changed globally, implying that at that time, no one intended to raise taxes, but now it is vital. Undoubtedly, trust in the British economy and government has immediately declined, and investors are divesting from the British pound, viewing it as a currency from an unstable economy with uncertain prospects. It's worth mentioning that investors favor stability and a clear political/economic course that the government adheres to.
In my opinion, the British pound did not deserve a 450-basis-point decline over the last month, but I must acknowledge that the market has the right to sell. On Thursday, the Bank of England will hold a meeting, and any "dovish" moment in its outcomes could lead to further decline of the British currency. The pound sterling is currently in free fall. From time to time, it manages to cling to some branch or stone, but even a small push is enough for it to fall again. Therefore, if the MPC committee adopts a slightly more "dovish" stance than expected on Thursday, the pound could very well continue its free fall.
Based on the analysis of EUR/USD, the instrument continues to build an upward trend segment. Currently, the market is in a pause, but Donald Trump's policies and the Fed's remain significant factors in the future decline of the U.S. dollar. The goals of the current trend segment may reach the 25-figure mark. At this time, we can observe the formation of corrective wave 4, which is taking a highly complex, elongated form. Therefore, in the near future, I will still consider only buying, as any downward structures appear to be corrective. The latest structure, a-b-c-d-e, might be nearing its completion.
The wave picture for the GBP/USD instrument has changed. We still deal with an upward, impulsive segment of the trend, but its internal wave structure is becoming more complex. Wave 4 is taking on a three-wave form, and its structure is significantly longer than that of wave 2. Another downward corrective structure is approaching completion. I continue to anticipate when the main wave structure will resume its formation with initial targets around the 38 and 40-figure levels, and I believe this could happen as early as the beginning of November.
