empty
26.03.2025 06:37 PM
Analysis for GBP/USD on March 26, 2025

This image is no longer relevant

The wave pattern for GBP/USD remains somewhat ambiguous but overall workable. There is still a high probability of a long-term bearish trend forming. Wave 5 has taken a clear shape, so I consider the larger wave 1 to be complete. If this assumption is correct, wave 2 is currently unfolding, with targets around the 1.2600 and 1.2800 areas. The first two subwaves of wave 2 appear complete. The third one could finish at any moment.

Demand for the pound had been growing recently solely due to the "Trump factor," which remains the primary support for the British currency. However, in the longer term—beyond a few days—the pound still lacks a fundamental basis for growth. The Bank of England's and the Fed's positions have shifted in favor of the pound recently, as the BoE is now also reluctant to cut interest rates quickly. The current wave pattern remains intact for now, but another upward move would raise serious concerns.

The GBP/USD rate dropped by 55 basis points on Wednesday, marking the week's most significant movement. While news flow isn't absent this week, the reports have been mixed, and the market has shown little enthusiasm to trade actively. This results in stagnation. The pound is declining slightly—possibly as part of a corrective wave or the first wave of a future wave 3 in the bearish trend. In any case, everything may be decided next week, which we'll discuss further.

I won't go into the importance of Nonfarm Payrolls, unemployment rate, ISM indexes, and so on. This week, we also expect the U.S. GDP report. These are all undoubtedly important, but the market is awaiting developments regarding Trump's trade tariffs. Next week, the U.S. president may issue a new "verdict" against a number of countries, though his rhetoric has recently softened. Some concessions may be made, and the tariffs may not be as severe as the market fears or as Trump originally promised. Let's not forget that the U.S. president is fond of issuing threats and ultimatums, then assessing whether opponents fear them. If they do, he continues the threats to achieve his goals; if not, he eases pressure and settles for a basic set of "sanctions."

Therefore, if next week reveals mild tariffs, I believe demand for the U.S. dollar will rise. The wave pattern still suggests a bearish trend is developing, and next week may become the starting point for wave 3.

This image is no longer relevant

Final Thoughts

The wave pattern for GBP/USD indicates that the bearish trend continues, along with its second wave. I would advise looking for new short entry points, as the current wave count still suggests a bearish trend that began last autumn. However, how Donald Trump and his policies will continue to affect market sentiment—and for how long—remains uncertain. The pound's recent rally looks excessive relative to the wave pattern. The BoE and FOMC meetings could have launched wave 3, but apparently did not.

On the higher wave scale, the structure has evolved. We can now assume the bullish three-wave sequence is complete, and a bearish trend may be forming. If this assumption is correct, we should expect a corrective wave 2 or b, followed by an impulsive wave 3 or c.

Core Principles of My Analysis:

  1. Wave structures should be simple and clear. Complex patterns are hard to trade and often evolve unexpectedly.
  2. If you're uncertain about the market situation, stay out.
  3. Absolute certainty in market direction is impossible. Always use protective Stop Loss orders.
  4. Wave analysis can be combined with other forms of technical analysis and trading strategies.
Chin Zhao,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

EUR/USD Analysis – March 28th

The wave structure on the 4-hour chart for EUR/USD threatens to evolve into a more complex formation. A new downward structure began forming on September 25, taking the shape

Chin Zhao 19:10 2025-03-28 UTC+2

GBP/USD Analysis – March 28th

The wave structure of the GBP/USD instrument remains somewhat ambiguous, but overall digestible. At this stage, there is a strong likelihood that a long-term downward trend segment is forming. Wave

Chin Zhao 19:07 2025-03-28 UTC+2

Analysis for GBP/USD on March 27, 2025

The wave pattern for GBP/USD remains somewhat ambiguous, but overall, it is manageable. There is still a high probability of a long-term downward trend developing. Wave 5 has taken

Chin Zhao 18:07 2025-03-27 UTC+2

Analysis for GBP/USD on March 25, 2025

The wave pattern for GBP/USD remains somewhat ambiguous but still manageable. Currently, there is a high probability of a long-term downward trend forming. Wave 5 has taken a convincing shape

Chin Zhao 18:36 2025-03-25 UTC+2

Weekly Forecast Based on Simplified Wave Analysis for GBP/USD, AUD/USD, USD/CHF, EUR/JPY, #Ethereum, #Litecoin – March 24th

In the coming days, GBP is expected to move sideways with a flat bias. Pressure on the lower boundary of the support zone is possible, followed by stabilization

Isabel Clark 11:21 2025-03-24 UTC+2

Weekly Forecast Based on Simplified Wave Analysis: EUR/USD, USD/JPY, GBP/JPY, USD/CAD, #Bitcoin, #Ripple – March 24th

A continuation of the overall sideways movement of the euro is expected in the coming week, fluctuating between the nearest opposing zones. A downward vector is more likely

Isabel Clark 11:13 2025-03-24 UTC+2

Analysis for GBP/USD on March 21, 2025

The wave structure for GBP/USD remains somewhat ambiguous, but overall manageable. At present, there's still a high probability of a long-term downward trend developing. Wave 5 has taken

Chin Zhao 18:42 2025-03-21 UTC+2

Analysis for EUR/USD on March 21, 2025

The EUR/USD pair saw no change on Friday. There was no news background in the direct sense of the word today, so the market had nothing to respond

Chin Zhao 18:39 2025-03-21 UTC+2

Analysis for EUR/USD on March 20, 2025

The wave structure on the 4-hour chart for EUR/USD is at risk of transforming into a more complex formation. A new downtrend structure started forming on September 25, which took

Chin Zhao 18:37 2025-03-20 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.