The wave marking for the pound/dollar instrument currently appears quite confusing, but it still needs to be clarified. We have a five-wave upward trend segment that has taken the form of a-b-c-d-e and may already be finished. As a result, the instrument's quote increases may last a while. However, the European currency has recently begun to grow once again, and both instruments should ideally move in the same direction. As a result, the pound is simply waiting for the euro to finish creating another upward wave so that a mutual decline can start. Recently, the British pound's news background has been so varied that it is challenging to sum it up in one word. The British pound had more than enough reasons to rise and fall.
As you can see, it primarily went with the first option. The internal wave structure of wave e has become more complex due to the rise in quotes over the past week, but so far, only this wave and only part of the trend section have done so. I'm still waiting for the decline of both instruments because the wave marking on both instruments allows the ascending section to be built to completion.
The Fed is signaling a tightening of monetary policy.
The pound/dollar exchange rate on Wednesday increased by 65 basis points. Since no report of interest in the dollar or pound has yet been released at the time of writing, such a movement cannot be viewed as either too strong or too weak, or related to today's news background. The third quarter GDP report for the US will be released soon, and an ADP report that details the number of jobs added in the non-agricultural sector in November will follow soon after. The market will not react violently to the first or second report. This morning, it has already made it clear that it has no intention of regaining the more crucial report on European inflation. In America, we will only receive the second of three estimates for the GDP report. The nonfarm payroll report is regarded as more significant and informative than the ADP report. Payrolls are reclaimed using the market, but ADP is ignored. Three significant reports released at a time might not affect how the instrument moves.
What do we still have? Only Jerome Powell's evening speech, president of the Fed. I am still determining how people will respond to this event. There's a good chance the market will only discover something worthwhile there. Since it is more or less obvious to everyone that the rate will increase by 50 basis points in December, few people now anticipate Powell's rhetoric to change. The market does not anticipate anything else because this fact has been well-established. Powell must therefore come up with a surprise for the market by allowing the instrument to trade with higher amplitude in the evening. Today may end up being just another passing day. However, it had a great chance of becoming extremely active and forming a downward trend section for both instruments.
The construction of a new downward trend segment is predicated on the wave pattern of the pound/dollar instrument. Since the wave marking permits the construction of a downward trend section, I cannot advise purchasing the instrument. With targets around the 1.1707 mark, or 161.8% Fibonacci, sales are now more accurate. The wave e, however, can evolve into an even longer shape.
The euro/dollar instrument and the picture look very similar at the larger wave scale, which is good because both instruments should move similarly. The upward correction portion of the trend is currently almost finished. If this is the case, a new downward trend will soon develop.