As things stand with less than a month left of 2025, GBPUSD is on track for an annual gain of more than 5%. At 1.3215, the pair is still down 37.5% from its pre-Financial Crisis top in 2007, but up significantly since Liz Truss’ disastrous mini-budget tanked it to under 1.0400 in 2022. The question is, can it keep rising in 2026? While the decisions of any government or central bank are next to impossible to predict, the Elliott Wave chart below gives the bulls reasons for optimism.
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It shows that the post-2022 recovery from 1.0357 looks like a sequence of first and second waves. There is a leading diagonal up to 1.3142, marked 1-2-3-4-5 in wave (1/A), followed by an A-B-C running flat correction in wave (2/B). Once a correction is over the preceding trend resumes and that’s exactly what happened in GBPUSD this year.
The pair rose from a pip below 1.2100 in January to nearly 1.3800 in July, before losing some ground in recent months. In the process, it broke the resistance line drawn through the 2021 and 2024 peaks, and seems to be turning it into support now. This indicates that the bulls are still alive and kicking, allowing us to mark the 2025 developments as waves 1 and 2 of (3/C). If this count is correct, we can expect a notable increase in GBPUSD in wave 3 of (3/C). Upside targets near 1.6000 make sense going into 2026.
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