For the pound/dollar instrument, the wave marking looks quite complicated but does not require any clarification. We have a supposedly completed downward trend segment consisting of five waves a-b-c-d-e. If this is true, then a new upward section of the trend has begun. Its first and second waves are presumably completed, and the third wave is being built, which can be both 3 and C. Since the European wave marking has changed, both wave markings now coincide. As I have already said, the upward structure can be limited to only three waves. In this case, the completion of the third wave may occur at any time, after which the construction of a new downward trend section may begin since the peak of this wave is already above the peak of the first wave. And if this wave is c, and not 3, then it should not be extended. Just a small approach above the last peak, which already exists, is enough. We managed to sort out the wave markings, they have recently left many questions unanswered, but there are still huge doubts that the demand for the British will grow for a long time now. The instrument retains the possibility of resuming a downward trend segment.
The market keeps in mind the meeting of the Bank of England but first prepares for the Fed.
The exchange rate of the pound/dollar instrument increased by 80 basis points on November 1, and the overall decline in quotations over the past few days is quite small. Thus, the instrument remains near its peaks and at the stage of constructing the proposed wave 3. Unlike a similar wave in the euro currency, this wave looks impulsive and can take a pronounced five-wave form. The first wave of the expected upward trend segment, which originates on September 26, looks the same. These conclusions make me think that a Briton can pull a European up. As I have already said, the euro and the pound rarely move in different directions. If the pound rises, then, most likely, the euro currency will also increase, whose wave marking does not look like an impulse one right now.
I believe that the main reason for the absence of a decline in the British dollar at this time (before the Fed meeting) is that the market does not forget about the meeting of the Bank of England. Let me remind you that the market is waiting for a stronger rate hike from the British regulator than at previous meetings. If this assumption is correct, the instrument may continue to be in demand, as the Bank of England may soon begin to catch up with the Fed regarding interest rates. In general, the whole wave picture now looks like the downward section of the trend has been completed, but at the same time, the news background can change the market's mood. Remember that the demand for the euro and the pound fell very much in 2022 due to geopolitical tensions, an impending recession on the world economy, a strong fall in stock markets, and a strong rise in energy prices. Because of this, structural changes are taking place in the economies of many countries. For example, in the UK they are going to raise taxes instead of lowering them...
The wave pattern of the Pound/Dollar instrument assumes the construction of a new upward trend segment. Thus, now I advise buying the instrument on the MACD reversals "up" with targets near the estimated mark of 1,1705, which equates to 161.8% Fibonacci. You should buy cautiously since the trend's downward section may resume construction.
The picture is very similar to the Euro/Dollar instrument at the higher wave scale. The same ascending wave that does not fit the current wave pattern, the same five waves down after it. The downward section of the trend can turn out to be almost any length, but it may already be completed.