In the new week, there will be no notable events in the UK, unlike the Eurozone or the U.S. Even the central bank meeting will take place later than those of the European Central Bank and the Federal Reserve. Therefore, traders focusing on GBP/USD will need to concentrate primarily on U.S. news flow. Unfortunately, in October, the market seems to either interpret many events surrounding the dollar in a very strange way or overlook them. In my view, buyers had sufficient reasons to start taking action, especially since the wave structure fully supported them. However, the wave pattern began to complicate at the beginning of the month, and now we are witnessing the complication of an already intricate wave structure. Additionally, any chart shows a sideways trend that could lead to new complexities within complex corrective structures.
Typically, the most important reports from the UK are released in the third week of each month. Therefore, the market has already digested most of the critical information. It was reported that business activity in the manufacturing sector jumped sharply from 46.6 to 49.6, while services activity kept the overall picture intact, rising to 51.1. Inflation in the UK has remained at 3.8% year-on-year for the third consecutive month, giving the market and the Bank of England hope that the acceleration is ending. Nonetheless, in my opinion, the Consumer Price Index remains too high to begin discussions about a fourth round of monetary policy easing in 2025.
I believe that the relatively positive reports from the UK last week, combined with somewhat negative reports from the U.S., could have led to a sharp increase in demand for the pound. However, market participants have not begun constructing a new upward wave. On the contrary, their activity has dropped to very low levels. November is approaching, bringing the most interesting events in the U.S.-China confrontation. The U.S. Supreme Court's ruling regarding all of Donald Trump's tariffs will also be revealed. Meanwhile, the shutdown continues. How the dollar can feel good amid such news is a mystery.
Wave Structure Analysis for EUR/USD:
Based on the analysis of EUR/USD, I conclude that the instrument continues building 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 U.S. dollar's decline. The targets for the current trend segment could reach up to the 25 figure. We are currently observing the formation of corrective wave 4, which is taking on a highly complex, elongated form. Therefore, I continue to consider only long positions for the near future. I expect the euro to reach 1.2245 by the end of the year, which corresponds to 200.0% on the Fibonacci.
Wave Structure Analysis for GBP/USD:
The wave structure of GBP/USD has evolved. We continue to deal with a bullish, 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 far more extended than that of wave 2. The next downward three-wave structure is presumed complete, but it could potentially be further complicated. If that is indeed the case, the upward movement of the instrument within the global wave structure may resume, with initial targets around the 38 and 40 figures, although the correction is ongoing at this time.
Key Principles of My Analysis:
Wave structures should be simple and understandable. Complex structures are difficult to trade and often carry changes.
If there is uncertainty in what is happening in the market, it is better not to enter.
There can never be 100% certainty in the direction of movement. Always remember to use protective stop-loss orders.
Wave analysis can be combined with other types of analysis and trading strategies.
The material has been provided by InstaForex Company - www.instaforex.com
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In the new week, there will be no notable events in the UK, unlike the Eurozone or the U.S. Even the central bank meeting will take place later than those of the European Central Bank and the Federal Reserve. Therefore, traders focusing on GBP/USD will need to concentrate primarily on U.S. news flow. Unfortunately, in October, the market seems to either interpret many events surrounding the dollar in a very strange way or overlook them. In my view, buyers had sufficient reasons to start taking action, especially since the wave structure fully supported them. However, the wave pattern began to complicate at the beginning of the month, and now we are witnessing the complication of an already intricate wave structure. Additionally, any chart shows a sideways trend that could lead to new complexities within complex corrective structures.
Typically, the most important reports from the UK are released in the third week of each month. Therefore, the market has already digested most of the critical information. It was reported that business activity in the manufacturing sector jumped sharply from 46.6 to 49.6, while services activity kept the overall picture intact, rising to 51.1. Inflation in the UK has remained at 3.8% year-on-year for the third consecutive month, giving the market and the Bank of England hope that the acceleration is ending. Nonetheless, in my opinion, the Consumer Price Index remains too high to begin discussions about a fourth round of monetary policy easing in 2025.
I believe that the relatively positive reports from the UK last week, combined with somewhat negative reports from the U.S., could have led to a sharp increase in demand for the pound. However, market participants have not begun constructing a new upward wave. On the contrary, their activity has dropped to very low levels. November is approaching, bringing the most interesting events in the U.S.-China confrontation. The U.S. Supreme Court's ruling regarding all of Donald Trump's tariffs will also be revealed. Meanwhile, the shutdown continues. How the dollar can feel good amid such news is a mystery.
Wave Structure Analysis for EUR/USD:
Based on the analysis of EUR/USD, I conclude that the instrument continues building 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 U.S. dollar's decline. The targets for the current trend segment could reach up to the 25 figure. We are currently observing the formation of corrective wave 4, which is taking on a highly complex, elongated form. Therefore, I continue to consider only long positions for the near future. I expect the euro to reach 1.2245 by the end of the year, which corresponds to 200.0% on the Fibonacci.
Wave Structure Analysis for GBP/USD:
The wave structure of GBP/USD has evolved. We continue to deal with a bullish, 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 far more extended than that of wave 2. The next downward three-wave structure is presumed complete, but it could potentially be further complicated. If that is indeed the case, the upward movement of the instrument within the global wave structure may resume, with initial targets around the 38 and 40 figures, although the correction is ongoing at this time.
Key Principles of My Analysis:
- Wave structures should be simple and understandable. Complex structures are difficult to trade and often carry changes.
- If there is uncertainty in what is happening in the market, it is better not to enter.
- There can never be 100% certainty in the direction of movement. Always remember to use protective stop-loss orders.
- Wave analysis can be combined with other types of analysis and trading strategies.
The material has been provided by InstaForex Company - www.instaforex.com