For the pound/dollar instrument, the wave markup continues to look very convincing and does not require adjustments. The expected wave d-E is completed, and there should be five waves in total inside wave E, respectively, as in the case of the euro/dollar instrument, the downward trend section can continue its construction for some time within the framework of wave e-E. An unsuccessful attempt to break through the low wave c-E does not allow the market to continue selling the instrument. Near this mark, the instrument turned sharply upwards and began to increase, which ended as quickly as it began. Thus, the wave e-E should be more extended than it is now. Since the low of the assumed wave c-E is still broken, theoretically the wave e-E can end at any time (as in the case of the euro/dollar instrument). However, I still expect that the decline in the British dollar within this wave will be much stronger, given the current situation in Ukraine and the economic background in the UK, USA, and Europe. I am not considering alternative options for wave marking yet, but I admit that in the near future the downward section of the trend may complete its construction.
Will the President of the Bank of England support a fourth rate hike?
The exchange rate of the pound/dollar instrument decreased by 25 basis points on April 21. The instrument continues to remain near the low wave c-E, which indicates that the market is ready to strengthen the onslaught at any moment and continue building a downward wave. The information background this week was rather sparse, there were practically no reports concerning the pound or the dollar. However, today, around this time, there are speeches by the presidents of the Fed and the Bank of England, Jerome Powell and Andrew Bailey. I assume that one of them will make new interesting statements, following the example of Luis de Guindos from the ECB. More market attention will be directed to Mr. Bailey, as the issue of the fourth interest rate hike in May remains open. The Bank of England hinted at a possible rate increase to 1%, as inflation continues to be very high, but at the same time, the regulator may take a break for at least one month so as not to shock the markets by tightening monetary policy too quickly.
Tomorrow, Friday, several reports will be released in the UK, which may slightly affect the pound/dollar instrument. Early in the morning - a report on retail trade, a little later - business activity indices. Even later, Andrew Bailey's second performance in the last five days. The amplitude of the movements of the British this week was very weak, but perhaps tomorrow, when news and statistics begin to arrive on the foreign exchange market, it will be more active. In the US, business activity data will also be released. Since I expect a continued decline in quotations and a drop in demand for the pound, Friday's reports should be very strong to cause a market backlash. The British still do not have the necessary resources to complete the downward trend.
General conclusions
The wave pattern of the pound/dollar instrument still assumes the construction of wave E. I continue to advise selling the instrument with targets located around the 1.2676 mark, which corresponds to 100.0% Fibonacci, according to the MACD signals "down", since the wave e-E does not look fully equipped yet. Maybe this wave won't be too long, but it doesn't look complete right now.
On the higher scale, wave D looks complete, but the entire downward section of the trend does not. Therefore, in the coming weeks, I expect the instrument to continue to decline with targets well below the low of wave C. Wave E should take a five-wave form, so I expect to see the British quotes around the 27th figure.