empty
11.02.2025 03:16 PM
GBP/USD Analysis – February 11th: The Market Expects Too Much from Bailey

This image is no longer relevant

The wave structure of GBP/USD remains somewhat ambiguous but generally understandable. There is a high probability that a long-term bearish trend segment is still forming. However, the assumed Wave 2 in 1 appears weak, making the overall structure uncertain. Conversely, Wave 5 is well-formed, suggesting that the senior Wave 1 has been completed.

If this assumption is correct, we are now in a corrective phase, targeting the 1.2800 level. The first two waves of this corrective structure appear to be completed. Given that the euro is also undergoing a correction, I expect similar price action for the pound.

The Bank of England (BoE) is preparing for four rounds of monetary easing in 2025. The Fed does not plan rate cuts beyond 50 basis points. The UK economy continues to underperform, weakening investor confidence in GBP. The U.S. economy remains resilient, supporting USD strength. These factors suggest that traders are unlikely to engage in aggressive GBP buying while reducing USD positions.

GBP/USD remained unchanged on Tuesday, with minimal price movement over the past two days. Monday lacked significant global events, and Tuesday has yet to deliver any surprises. BoE Governor Andrew Bailey is set to speak soon, but the market may be overestimating the impact of this event.

The BoE's last policy meeting was less than a week ago. No major economic data has been released in the UK since then. Bailey previously highlighted slowing growth and the absence of urgency for further rate cuts. What are the chances that Bailey's stance has changed in just a few days? Very low. Bailey is not known for dramatic policy shifts or frequent speeches. His comments today are unlikely to change market sentiment. A bigger market mover could be Jerome Powell's speech—but even that comes with uncertainty.

Powell Does Not Answer to Congress

Neither the Fed nor Powell himself is obligated to Congress. While Congress members can ask Powell any questions, he is not required to provide direct answers. Trump failed to pressure the Fed in his first term, and Powell remains independent in policy decisions. As a result, Powell is unlikely to create problems for the U.S. dollar.

This image is no longer relevant

General conclusions

Wave structure confirms that the bearish trend is continuing, with the first wave completed. Traders should wait for a convincing corrective wave before seeking new short positions. Minimal corrective targets - 1.2600. More optimistic correction targets - 1.2800. The assumed Wave b in 2 is complete. GBP and EUR wave structures are similar but not identical.

At the larger wave structure, the previous upward three-wave correction has likely ended. If this assumption is correct, the market should prepare for corrective Wave 2 or b, followed by an impulse wave 3 or c (resuming the downtrend).

Key Trading Principles from My Analysis

1) Wave structures should be simple and clear. Complex formations are difficult to trade and are more prone to structural changes.

2) If the market outlook is uncertain, it is best to stay out.

3) There is never 100% certainty in market direction. Always use Stop Loss orders for risk management.

4) Wave analysis should be combined with other trading strategies. Integrating multiple forms of analysis improves overall accuracy.

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

Weekly Forecast BasSimplified Wave Analysis for GBP/USD, AUD/USD, USD/CHF, EUR/JPY, Ethereum, and Litecoin on March 10th

Analysis:The upward wave that started on January 13th remains incomplete, forming a new segment of the dominant global uptrend. The pair is currently trading within a narrow range between opposing

Isabel Clark 09:26 2025-03-10 UTC+2

Weekly Forecast Based on Simplified Wave Analysis for EUR/USD, USD/JPY, GBP/JPY, USD/CAD, GOLD, and Bitcoin on March 10th

Analysis:Since early February, the euro has been forming an upward zigzag wave, marking the beginning of a new bullish trend. The pair has reached a significant potential reversal zone

Isabel Clark 09:20 2025-03-10 UTC+2

GBP/USD Analysis – March 5th: The Pound Benefits from Trump

The wave structure for GBP/USD remains somewhat ambiguous but still largely understandable. Currently, the likelihood of forming a long-term downward trend remains high. Wave 5 has taken a convincing shape

Chin Zhao 19:25 2025-03-05 UTC+2

EUR/USD Analysis – March 5th

The wave pattern on the 4-hour EUR/USD chart appears clear and structured. A new downward cycle began on September 25, forming a five-wave impulse structure. Two months ago, a corrective

Chin Zhao 19:23 2025-03-05 UTC+2

GBP/USD Analysis – March 4th

The wave structure of the GBP/USD instrument remains somewhat ambiguous but still comprehensible. At present, there is a high probability of forming a long-term bearish trend segment. Wave

Chin Zhao 18:35 2025-03-04 UTC+2

GBP/USD Analysis – February 25th

The wave structure of GBP/USD remains somewhat ambiguous, but overall, it is clear. Currently, there is a high probability of forming a long-term bearish trend, with only Wave

Chin Zhao 17:55 2025-02-26 UTC+2

GBP/USD Analysis – February 25th: The Pound is in No Rush to Decline

The wave pattern for GBP/USD remains ambiguous but still comprehensible. There is a high probability of forming a long-term downward trend, with the main uncertainty revolving around wave

Chin Zhao 14:04 2025-02-25 UTC+2

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

Over the past six months, GBP/USD has been following a downtrend. Since mid-January, the price has been forming a counter-wave with reversal potential from a strong support zone. The final

Isabel Clark 15:31 2025-02-24 UTC+2

Weekly Forecast Based on Simplified Wave Analysis: EUR/USD, USD/JPY, GBP/JPY, USD/CAD, NZD/USD, Bitcoin – February 24th

The incomplete short-term bullish wave on the euro's major chart has been forming since the beginning of the month, extending beyond the H4 timeframe. The final (C) wave is currently

Isabel Clark 15:25 2025-02-24 UTC+2

Euro Currency: Weekly Preview

Over the past few weeks, demand for the euro has been increasing, but at such a slow pace that wave C has yet to surpass the peak of wave

Chin Zhao 04:46 2025-02-24 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.