GBP/USD and EUR/USD Technical Outlook: Wave Analysis and Trends

UK Political Landscape and Market Context

The recent departure of Prime Minister Keir Starmer follows a significant electoral defeat for the Labour Party. Analysts attribute this outcome to the public's unmet economic expectations following the UK's exit from the European Union, which triggered a decline in living standards. Despite government attempts to address wage growth and trade tariff adjustments, fiscal constraints and unpopular social spending cuts led to a erosion of voter confidence.

EUR/USD Technical Analysis

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The EUR/USD pair remains within an established upward trend, though it is currently navigating a short-term downward correction. Technical indicators suggest that this corrective phase may be nearing completion, potentially opening opportunities for long positions. Traders should monitor the 1.14 level, as the pair may test support below this threshold within the current wave C structure before finding a base.

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GBP/USD Technical Analysis

The wave structure for GBP/USD appears more defined than that of its Euro counterpart, as it has completed a three-wave downward formation compared to the five-wave structure seen in EUR/USD. This divergence suggests the pound may be concluding its corrective phase, potentially paving the way for a new upward trend segment. Should this pattern hold, the pair may target the 1.35 level, presenting a potential entry point for long-term buyers.

Trading Strategy and Risk Management

Successful wave analysis relies on prioritizing simple, clear structures over overly complex setups. Market participants are reminded that no analytical model guarantees a specific directional move, necessitating the consistent use of stop-loss orders. Traders are encouraged to supplement wave analysis with additional technical and fundamental indicators to validate potential entry signals.

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