See also
07.11.2025 12:48 AM
In my previous review, I mentioned that the outcomes of the Bank of England meeting did not surprise me at all, but at the same time, four "doves" represent almost as many as the "hawks" currently on the committee. The market anticipated a more unanimous decision, and a larger number of "doves" suggests that the BoE's stance is less "neutral" than expected. Consequently, the market had every reason to further reduce demand for the pound sterling on Thursday. However, the market's demand for the pound was increasing.
I want to remind you that the wave analysis for the GBP/USD instrument has become significantly complicated in recent weeks, which was unexpected for everyone. Economists continue to assert that there is low demand for the dollar in the futures markets and that the prospects for the U.S. currency are very unclear. Even with the news backdrop in mind, it remains difficult to say why the pound's decline has been so prolonged. Nevertheless, the anticipated wave four has taken a very complex, yet still three-wave form, and the internal wave has taken on a five-wave structure a-b-c-d-e. Theoretically, even this set of waves could become even more complicated, but I suggest we consider it as follows: either the pound will begin to construct a new upward segment of the trend now, or it will do so very far in the future, with no certainty about when and under what circumstances.
Returning to the meeting itself, the BoE has lowered its inflation forecast for the fourth quarter of 2025 to 3.5% (previously expected 3.6%). The Bank believes the 3.8% mark is the peak, and that the consumer price index will slow from there. Next year, it may return to 3% and eventually drop to the target level of 2%. Additionally, the British central bank expects unemployment to rise to 5.1% (currently 4.8%) and economic growth to be 1.5% in 2025. For 2026, a 1.2% growth rate is expected.
What conclusions can be drawn? Inflation is likely to remain elevated in the near term, which is unlikely to contribute to new "dovish" decisions from the BoE. However, given the voting results on the rate, I do not rule out that at the last meeting of the year the central bank may still decide to implement a new round of easing, fulfilling Andrew Bailey's promise from the beginning of the year of four rounds of easing. I would be cautious about making such optimistic forecasts concerning inflation, given global economic and geopolitical instability, but the coming months will show whether the BoE's calculations are accurate.
Based on the conducted analysis of EUR/USD, I conclude that the instrument continues to build an upward segment of the trend. Currently, the market is in a pause, but the policies of Donald Trump and the Fed remain significant factors for the future decline of the U.S. dollar. The targets for the current trend segment may reach the 25-figure level. At this time, we can observe the formation of corrective wave 4, which is taking a highly complex, elongated form. Therefore, in the near term, I still consider only buying, as any downward structures appear to be corrective. The latest structure, a-b-c-d-e, may be nearing completion or may already be finished.
The wave picture for the GBP/USD instrument has become more complex. We continue to deal with an upward, impulsive segment of the trend, but its internal wave structure is becoming more complex. Wave 4 is forming a three-wave shape, and its structure is significantly longer than that of wave 2. Another downward corrective structure is nearing completion. I continue to expect the main wave structure to resume its formation, with initial targets around the 38 and 40 figures, and I think this may occur as early as the beginning of November.
