The wave analysis for the pound/dollar pair now appears challenging, but it does not call for any clarifications. There are some distinctions between the wave patterns of the euro and the pound, including the euro's current high likelihood of growth. I believe that the downward part of the trend is still being built at this time. 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. Of course, I anticipate a more pronounced decline in British quotes, but it should be noted that predictions do not always match reality. If the euro's downward trend is complete, there is a greater than 50% chance that all ended on wave c for the British pound. The movements that follow are not wave d, but the first wave of a new upward trend segment instead. The pair may very well turn the December 13 originating downward segment of the trend into a five-wave corrective. The wave pattern would have looked more convincing in this scenario, but once again, there is a very small likelihood that the euro and the pound would develop completely separate trends. And for the euro, everything appears to be pointing toward the start of a move upward.
The pound is rising, but everything is unclear.
The pound/dollar exchange rate dropped by 20 basis points on Tuesday, but this is such a slight decrease that no inferences should be made from it. The anticipated wave d might not even be a wave d at all, but rather the first wave of a new upward trend section. It's still unclear. The news background can't help the market make the right decision in any way. Andrew Bailey gave only two speeches in the first three days of the week, both of which contained limited and significant information. Although the demand only marginally increased after these speeches, it cannot be said that they have started to dictate the market's mood.
The market has nothing to look forward to from the news this week. The fourth-quarter GDP figure will be made public tomorrow in the United States and on Friday in the United Kingdom. The third semester, though, will be the last. That is, unexpected values are rare because the market is fully aware of what to anticipate from these reports. What should the market do if there are no shocks because it is already aware of these values? Furthermore, it won't mean much if the British economy experiences zero growth in the fourth quarter. The Fed and Bank of England's monetary policies continue to influence the market today. The British pound may have been in demand in recent weeks as a result of the Bank of England's anticipated stronger increase in interest rates this year. But if that's the case, the market has already reclaimed it. The overall scenario is unclear.
Conclusions in general.
The wave pattern of the pound/dollar pair presumably represents the end of a segment of a downward trend (due solely to the correlation of the euro and the pound). According to the "up" reversals of the MACD indicator, it is possible to take into account purchases with targets higher than the 25-figure range at this moment. The possibility of developing a downward wave e, the targets of which are situated 500–600 points below the current price, is something I do not entirely rule out, though. We can now take into account purchases as well.
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 completed. 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.
