The wave analysis for the pound/dollar pair now appears challenging, but it does not call for any clarifications. The wave patterns for the euro and the pound differ in a few ways, with the euro currently showing a high probability of growth. I believe that the downward part of the trend is still being built at this time. Wave c took on an extended form and can now be completed since, albeit by a few points, the pair declined below the low of wave a. Although it should be emphasized that forecasts do not often match reality, I predict a sharper decrease in the value of the pound. If the euro's downward trend is completed, there is a greater than 50% chance that all ended on wave c for the British pound. Additionally, the moves that follow it are not wave d but rather the initial wave of a new upward trend segment. The pair has the potential to turn the downward section of the trend, which began on December 13, into a five-wave corrective. The wave analysis 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, according to the euro, everything appears to be the start of an upward trend.
The British pound isn't prepared for a rapid decline.
On Friday, the pound/dollar pair's exchange rate fell by 50 basis points, which is a significant amount considering that even the euro lost more and the news background for both pairs was essentially the same. For the British pound, the situation is made worse by the fact that all three business activity indicators in the country fell short of market forecasts. Nonetheless, a new rise in quotes began today, Monday, in the absence of any news background, suggesting that the previous upward wave may take an even longer form. The development of an upward trend section will also have started with the updating of the previous peak (the peak of wave b). In this scenario, both wave patterns will start to line up once more, making this choice appear more likely.
It is exceedingly challenging to identify the factors that may lead to the British pound gaining ground in the near future. I should point out that the Bank of England hasn't made any new, "hawkish," announcements. Even though the rate has since increased by 11 times, inflation is still out of control. The market may be anticipating a more pronounced tightening of monetary policy from the ECB and the Bank of England, but this does not imply that regulators will follow the expectations of the market. If it happens, I believe that the rise in the euro and pound will be a step forward. Such a change would be natural if regulators in 2023 did raise the rate higher than the Fed. If not, nothing will stop the market from sharply decreasing consumer demand for the euro and pound. If we try to analyze the wave pattern over time, the chance of growth for both pairs increases since their wave c was found to be very weak and barely managed to update the low of wave a.
Conclusions in general
The wave pattern of the pound/dollar pair presumably represents the end of a segment of a downward trend (solely due 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.
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.