empty
20.08.2025 06:39 PM
GBP/USD Analysis on August 20, 2025

This image is no longer relevant

For GBP/USD, the wave structure still indicates the development of an upward impulse sequence. The wave pattern is almost identical to EUR/USD, since the only "driver of the show" remains the dollar. Demand for it is declining across the market (in the medium term), which is why many instruments are showing almost the same dynamics. At this stage, wave 4 appears to be complete. If that is the case, the instrument's rise will continue within impulse wave 5. Wave 4 could take the form of a five-wave structure, but this is not the most likely scenario.

It should be remembered that much on the currency market now depends on Donald Trump's policies, not only trade-related. From time to time, good news comes out of the U.S., but the market constantly keeps in mind economic uncertainty, contradictory decisions and statements by Trump, and the White House's hostile and protectionist stance. Global tensions are rising and, as I already mentioned, the dollar remains the main culprit—hence it takes most of the "hits."

The GBP/USD rate on Wednesday again showed almost no change, with weak movements. This phenomenon is explained by the virtually empty news background this week. The first noteworthy report was released today, but it failed to impress market participants. The UK Consumer Price Index continues to rise, and at first glance, it is difficult to explain why. For example, in the Eurozone, with much lower interest rates, inflation is not increasing. In the U.S., however, inflation is rising despite much higher rates. Thus, it can be concluded that each economy responds very individually to the global trade war.

The inflation report itself could have increased demand for the pound. If inflation is rising faster than markets expected, it means expectations for Bank of England monetary easing are reduced. At the same time, expectations for Federal Reserve easing have been running high for the past year and a half. Therefore, the U.S. currency still has very little growth potential.

I also note the slightly updated wave count. We saw a convincing, classic three-wave corrective structure forming wave 4. Then came an increase in quotes, which could represent wave 1 of 5. If this assumption is correct, wave 2 of 5 is currently unfolding. Accordingly, this or next week, a new upward move may be expected, potentially prolonged, since wave 3s are often the most extended in impulse structures. In my view, Powell's speech may support sellers, as I see no strong reasons for him to signal a rate cut in September. I believe Mr. Powell will take a cautious stance without direct hints of resuming the monetary easing cycle.

This image is no longer relevant

General conclusions

The GBP/USD wave picture remains unchanged. We are dealing with an upward impulse section of the trend. Under Donald Trump, the markets may still face many shocks and reversals that could significantly affect the wave picture, but for now, the working scenario remains intact. The targets for the upward section of the trend are now near 1.4017. At this stage, I assume that downward wave 4 has been completed. Therefore, I recommend buying with a target at 1.4017.

Basic principles of my analysis:

  1. Wave structures should be simple and clear. Complex structures are difficult to trade and often lead to revisions.
  2. If there is no confidence in the market situation, it is better to stay out.
  3. Absolute certainty about market direction is impossible. Always remember to use protective Stop Loss orders.
  4. Wave analysis can be combined with other types of analysis and trading strategies.
Chin Zhao,
Analytical expert of InstaForex
© 2007-2025
Summary
Urgency
Analytic
Alexander Dneprovskiy
Start trade
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 on October 8, 2025

The wave structure of the 4-hour EUR/USD chart has remained unchanged for several months, but in recent weeks it has become more complex. It is still too early to conclude

Chin Zhao 21:52 2025-10-08 UTC+2

EUR/USD Analysis on October 7, 2025

The wave pattern on the 4-hour chart for EUR/USD has remained unchanged for several months, but in recent weeks it has taken on a more complex form. It is still

Chin Zhao 19:26 2025-10-07 UTC+2

Weekly Forecast Using Simplified Wave Analysis for GBP/USD, AUD/USD, USD/CHF, EUR/JPY, EUR/GBP, #Ethereum, and US Dollar Index – October 6th

At the start of the coming week, a pullback in the British pound to the calculated resistance zone is likely. Afterward, a reversal may form

Isabel Clark 21:17 2025-10-06 UTC+2

Weekly Forecast Using Simplified Wave Analysis for EUR/USD, USD/JPY, GBP/JPY, USD/CAD, EUR/CHF, and Gold – October 6th

EUR/USD Analysis: The euro quotes continue to move within an uptrend. Over the past two weeks, a downward zigzag has formed from the resistance zone. Currently, the price is moving

Isabel Clark 21:02 2025-10-06 UTC+2

EUR/USD Analysis on October 6, 2025

The wave pattern on the 4-hour chart for EUR/USD has remained unchanged for several months, but in recent weeks it has taken on a more complex form. It is still

Chin Zhao 20:56 2025-10-06 UTC+2

GBP/USD Analysis on October 3, 2025

For GBP/USD, the wave structure continues to indicate the building of an upward wave pattern, and it has not changed over the past week. The pound has fallen too much

Chin Zhao 21:00 2025-10-03 UTC+2

EUR/USD Analysis on October 3, 2025

The wave structure on the 4-hour chart for EUR/USD has remained unchanged for several months, but in recent days it has started to take on a rather complicated shape

Chin Zhao 20:56 2025-10-03 UTC+2

EUR/USD Analysis on October 2, 2025

The EUR/USD exchange rate barely changed on Thursday, and over the course of the current week it has risen by only 35 basis points. The wave pattern on the 4-hour

Chin Zhao 18:52 2025-10-02 UTC+2

EUR/USD Analysis on October 1, 2025

The wave structure on the 4-hour chart for EUR/USD has not changed for several months, but in recent days it has taken on a rather complex form. It is still

Chin Zhao 17:17 2025-10-01 UTC+2

EUR/USD Analysis on September 30, 2025

The wave structure on the 4-hour chart for EUR/USD has not changed for several months, but in recent days it has started to look more complicated. It is still

Chin Zhao 21:14 2025-09-30 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.