Forex Analysis & Reviews: 16.05.2025 - GBP/USD Analysis on May 16,...

Live Chat

InstaForex Loprais Team - Official participant of the Dakar rally

This section features the most important information about trading with InstaForex. We provide both analysis from leading experts for experienced traders and articles on trading conditions for beginners. Our services will help increase your profit potential.

Become Trader

Account Opening

See also

Trading Conditions

Forex Analytics

Charts

This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.

Start as Beginner

How to start trading

Useful information

Training and recordings

InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.

Become Investor

PAMM System

ForexCopy System

Passive investments

OYS account

Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.

Become Partner

Main Page

Partner Area

Advantages for Affiliates

Registration

This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.

All Promo Campaigns

Bonuses

Contests

Events

Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.

Full details

Forums

We are in social networks

Forex humour

Forex Portal

InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.

Learn More

History

Why Choose Us

InstaSport

Regulation

Company News

Awards

InstaForex Stars

InstaForex Offline

Headquarters

Key documents

Social Responsibility

InstaForex - Official partner of Dragon Racing

16.05.2025 06:43 PM

GBP/USD Analysis on May 16, 2025

The wave structure for the GBP/USD instrument continues to indicate the formation of a bullish impulsive wave sequence. "Thanks" to Donald Trump, the wave pattern closely mirrors that of EUR/USD. Until February 28, we observed the development of a convincing corrective structure that caused no concern. However, demand for the U.S. dollar began to fall sharply, which resulted in the formation of a bullish five-wave structure. Wave 2 took the form of a single wave and was completed. Therefore, we are currently seeing a continuation of pound growth within wave 3, a process that has been unfolding for the past three weeks.

Given that the UK's news background has had no impact on the pound's strong rally, we can conclude that currency movements are being dictated entirely by Donald Trump. If (theoretically) Trump changes his trade policy, it's possible the trend could reverse—this time to the downside. Accordingly, in the coming months (or even years), we should carefully monitor every action from the White House.

The GBP/USD rate remained virtually unchanged on Friday. Although the end of the week has been packed with headlines, the market has been dull in terms of price action. Today, for the first time in three years, direct negotiations between Russian and Ukrainian delegations are taking place to discuss a temporary or permanent ceasefire. Talks began several hours ago in Turkey, and the world is watching closely. No outcomes have been reported yet, but even a temporary ceasefire would be a major success—and a chance for Donald Trump to declare that he ended the war.

Let's recall that Trump, for unknown reasons, promised to end the war in Ukraine even before officially taking office as president. His motivations are unclear. Perhaps he wants to be remembered as a leader who could deliver. Perhaps he hopes to be nominated for a Nobel Peace Prize. Or maybe he simply wants to reduce the financial burden on the U.S. budget caused by supporting Ukraine. In any case, if a ceasefire is achieved, Trump will undoubtedly claim credit.

Economic data has hardly sparked any interest from market participants. For the first time in a while, the UK economy posted a somewhat decent growth rate—but the pound barely reacted. Why would traders care about Britain's economy, which has been inching up by a few tenths of a percent every quarter for the past three years, when they have the support of someone like Donald Trump? Thanks to the American president alone, the pound has risen nearly 15 cents in a matter of months. And this may not be the end. Three months ago, hardly anyone predicted such a rally—or such aggressive tariffs imposed on half the world. Therefore, Trump still has the power to surprise the market, and the dollar may continue to weaken.

General Conclusions

The wave pattern for GBP/USD has transformed. We are now dealing with a bullish impulsive segment of the trend. Unfortunately, under Donald Trump, the markets may face many more shocks and reversals that conflict with the wave structure or any type of technical analysis. Wave 3 continues to form, with the next targets set at 1.3541 and 1.3714. As such, I continue to consider buying opportunities, since the market currently shows no signs of wanting to reverse this trend.

On the higher wave scale, the structure has also shifted to bullish. We can now assume the development of a long-term upward trend. The nearest targets are 1.2782 and 1.2650.

Key Principles of My Analysis:

Wave structures should be simple and clear. Complex structures are hard to trade and frequently subject to change.
If you're unsure about what's happening in the market, it's better to stay out.
There is never 100% certainty in market direction. Always use protective Stop Loss orders.
Wave analysis can be combined with other types of analysis and trading strategies.

You have already liked this post today

*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.