For the pound/dollar instrument, the wave marking looks quite complicated at the moment but still does not require any clarification. The upward wave, built between May 13 and May 27, does not fit into the overall wave picture, but it can still be considered corrective as part of the downward trend section. Thus, it can now be concluded that the downward section of the trend continues its construction. At the moment, we have completed waves a, b, c, and d, so we can assume that the instrument is inside wave e. This wave could also have completed its construction at the beginning of this week, but I cannot conclude that the entire downward section of the trend has been completed. The instrument can build a three-wave correction structure upwards (or even one wave), after which it can resume the decline. Both descending sections of the trend (European and British) may take on an even more extended form than now. Therefore, both instruments continue to move almost without corrective structures. As before, you must try isolating impulse structures and working on them.
The Bank of England will not be able to save the pound.
The exchange rate of the pound/dollar instrument did not rise or fall by a single point on September 29. Of course, the amplitude of movements during the first part of the day was not the lowest, but at first, the demand for the British fell, then grew. As a result, there are no changes. Many analysts are now arguing about whether the crisis of the British currency is over. And it is impossible to call what has been happening in recent weeks and months anything other than a crisis. The British currency has dropped to values the market has not yet seen, and now it is trying to move as far as possible from the reached lows for the third day in a row. What factors can support the demand for the British pound?
From my point of view, there are a few such factors. The news background remains tense, capable of deteriorating many times, and simply bad. In such a situation, one could count on certain actions by the regulator to save the national currency, but experts believe this is impossible. The Bank of England has faced so many problems and shocks that it is now not up to the pound, which may become cheaper than the dollar in the near future. Currency interventions, which imply the withdrawal of excess money supply to increase the exchange rate, could support the pound, but the Bank of England, on the contrary, announced the purchase of long-term bonds. Recently, the Bank of Japan tried to save the rapidly depreciating yen and intervened. The yen rose in price by five figures and then lost the same amount. Therefore, many analysts and I do not believe that the Bank of England will take such a step. Other central banks in the world are condemning such initiatives. After all, if all the central banks of the world print money as much as they want or withdraw it from the economy when they want, it will resemble one eternal process of manipulating the exchange rate. Fair enough – when the market sets the exchange rate, not the central bank.
General conclusions.
The wave pattern of the pound/dollar instrument suggests a continued decline in demand for the pound. I advise now selling the instrument, as before, on the MACD reversals "down." It is necessary to sell more cautiously since, despite a strong decline, the construction of a downward trend section may be completed in the near future. And the goals of this section are scattered up to the 1.0140 mark, which corresponds to 261.8% Fibonacci, but now a correction wave can be built.
The picture is very similar to the euro/dollar instrument at the higher wave scale. The same ascending wave does not fit the current wave pattern, the same five waves down after it. Thus, one thing is unambiguous – the downward section of the trend continues its construction and can turn out to be almost any length.
