The wave picture for the Pound/Dollar instrument looks more convincing after making adjustments. However, some assumptions still remain that allow us to assume one or more alternative scenarios for the development of events. For example, the current downward trend section may take a three-wave form a-b-c. In this case, the construction of its third wave may be completed in the next week and the construction of the upward trend section, which originates more than a year ago, and may take on an even more complex and extended form, will resume. Although, at the moment, it looks rather complicated and ambiguous. However, I still believe that five downward waves will be built. The third wave acquires its own internal wave structure, in which completed waves 1 and 2 are already visible. Thus, I am now waiting for the resumption of the decline in quotes. And vice versa, if the peak of the supposed wave 1 in 3 or s is overcome, then the entire wave counting may require making adjustments and additions.
The news background for the Pound/Dollar instrument was favorable on Wednesday. Early in the morning, the UK's fourth-quarter GDP report was released, which increased compared to the previous estimate, and amounted to 1.3% on an annualized basis. In addition, the volume of investments increased by 5.9% in the 4th quarter, although the markets expected a more modest increase, no more than 1.3% QoQ. Thus, the statistics pleased the buyers of the pound sterling, and the currency itself rushed up. So far, this increase in the quotes of the instrument does not break the current wave pattern. Building a 3-in-3 or c wave remains a working option. But the markets missed the American statistics, although a rather important ADP report was released there, which shows changes in the number of employees in the US economy. In March, their number increased by 517,000. This is the highest increase in the last 6 months, which indirectly indicates the reduction in unemployment and the recovery of the labor market, which the US government and the Fed want to achieve. However, the demand for the US dollar has not increased at all since the release of this report. The sterling is trying to continue to rise and this is dangerous for the current wave counting. If the rise in quotes continues, then with a high degree of probability wave 3 or c will be interpreted as c and will take on a fairly shortened form. On the first day of April in the UK, markets may pay attention to the report on business activity in the manufacturing sector, and in the US - on the number of initial and continuing applications for unemployment benefits and business activity indices in the manufacturing sector. Although, to be honest, I do not think that the reaction to these reports will follow and will be significant.
And at this time, I still expect the construction of a downward wave 3 or c. Thus, I recommend continuing to sell the instrument for each new MACD signal "down" with targets located around the 35th figure. So far, there are no grounds for making changes to the current wave counting.
The part of the trend, originating on September 23, has taken on a five-wave fully completed form. Thus, this section of the trend is presumably completed, and the decline in quotes may resume as part of the construction of a new downward trend, the first two waves of which have already completed their construction. Despite some ambiguity in the internal counting of the upward trend, the main thing now is the credibility of the layout of the new downward trend.
