The wave marking for the pound/dollar instrument required clarifications, which were made. The upward wave constructed between May 13 and May 27 does not currently fit into the overall wave picture, but it can still be regarded as a segment of the downward trend. Thus, we can now definitively state that the building of the upward correction phase of the trend has been canceled, and the downward component of the trend will have a longer and more complex shape. I'm not a big fan of continually complicating the wave marking when dealing with a highly elongating trend zone. I believe it would be far more efficient to recognize rare corrective waves, following which new impulse structures may be constructed. Now that waves 1 and 2 have been completed, we may infer that the instrument is in the process of constructing wave 3. If this is the case, the slide may continue with objectives near the 161.8% Fibonacci level. The market has demonstrated that it is now more necessary to adhere to the trend than to mark waves.
There were two rounds of voting for the new Prime Minister.
In July, the pound and dollar exchange rates climbed by 40 basis points. Yesterday, there was no news background in the United Kingdom, while a number of reports were released in the United States that boosted the British economy at least a little. In June, retail sales in the United States increased by 1 percent, against market expectations for a lesser increase. Compared to predictions of +0.1 m/m, industrial production declined by 0.2% in June. The University of Michigan consumer sentiment index increased from 50.0 to 51.1. I cannot definitively state whether these figures are positive or negative. Instead, it was neutral since market expectations and actual report values were nearly identical. However, the absence of solid data may diminish demand for the US dollar. In any event, demand has not reduced to an alarming degree. And based on these statistics, the Briton did not improve his situation significantly.
This week has already seen two elections for a new prime leader in the United Kingdom. Several applicants were eliminated in each round, and five are currently remaining. I will mention that Rishi Sunak, who served as Finance Minister under Boris Johnson, is currently in the lead by a wide margin. However, such leadership should not be deceptive, as only two candidates will go to the final round, and all Conservative Party members will vote for them. Consequently, those votes currently going to candidates who have already flown out or will fly out in the subsequent rounds may not go to Sunak but to the second candidate. Nonetheless, I observe that most Conservative Party members of parliament like Rishi.
General observations.
The increased complexity of the pound/dollar pair wave structure currently signals a further collapse. For each "down" MACD signal, I recommend selling the instrument with objectives at the estimated mark of 1.1708, corresponding to 161.8 percent Fibonacci. An unsuccessful attempt to surpass 1.1708 may result in a departure of quotes from the reached lows, but it is unlikely to produce a corrective wave 4, since the last lowering segment of the trend will have a non-standard shape in this instance.
At the higher wave scale, the image closely resembles the euro/dollar instrument. The same ascending wave does not conform to the present wave pattern, followed by the same three descending waves. Thus, one thing is unmistakable: the downward segment of the trend continues to develop and can reach practically any length.