The wave analysis for the pound/dollar pair now appears to be challenging but does not call for any clarifications. The wave patterns for the euro and the pound differ somewhat, but both point to a decrease. Our five-wave upward trend part has the pattern a-b-c-d-e and is most likely already finished. I anticipate that the downward trend development, which will at least take the form of three waves, is currently ongoing. Since the pair descended below wave a's low, even if only by a few points, wave c has grown and can already be finished. However, it should be highlighted that expectations do not always match reality. I naturally anticipate a larger decrease in British quotes. The pair may very likely turn the trend's downward segment, which started on December 13, into a five-wave corrective, but it's also possible that it's already over. The pound has seen an increase in demand recently for a variety of reasons. The current rise in quotes, however, might only be wave d of a section of a downward trend, thus the collapse could happen again at any time.
UK statistics were disappointing.
On Wednesday, the pound/dollar pair's exchange rate rose by 50 basis points, and today it rose by another 40. As you can see, although three significant events over the last two days were connected to the pound at once, this pair's market activity was lower than that of the euro/dollar. There was a meeting of the Fed in addition to the Bank of England meeting, and the UK released its inflation report. However, the market had a passive response to all three events, which is uncommon. Even if the Fed and the Bank of England came to identical conclusions, demand for British currency is still rising. Generally speaking, the pound has been rising for almost three weeks. A movement like that is ideal for the most recent wave markup, which now assumes the creation of the corrective structure a-b-c-d-e. Moving forward, it is not fully clear why the demand for the pound has increased so significantly.
How many members of the Board of Governors would vote "for" a rate increase was one of the crucial questions the Bank of England needed answers to. The market anticipated that their number would drop from 7 to 6, signaling the imminent conclusion of the cycle of interest rate increases. However, only the tightening step has lowered; their number has not. This has led the regulator to soften its previously "hawkish" stance. Although UK inflation has resumed its upward trend, the rate will now increase by 25 points. I don't think the British pound has a particularly good chance of developing a new upward trend against such a news backdrop. I do not anticipate significant support from the euro either, given that the British pound and euro frequently trade similarly. Although the recent development of both pairs appears a little unusual, wave d for the British pound (if it is wave d) is about to come to an end. The development of wave e could start soon.
Conclusions in general.
The development of a downward trend section is implied by the wave pattern of the pound/dollar pair. When the MACD signal reverses to the "down" position, it is reasonable to consider sales with targets around the 1.1641 level, or 38.2% per Fibonacci. The peaks of waves e and b could be used to place a Stop Loss order. I anticipate the development of a downward wave e with targets 500–600 points below the current levels.
The image resembles that of the euro/dollar pair at higher wave scales, but there are still minor differences. The upward correction part of the trend has now been finished. If this presumption is true, we should be expecting the development of a downward section to last for five waves with a potential fall in the range of 14–16 figures.