The wave marking for the pound/dollar instrument currently appears quite confusing, but it still does not call for any clarifications. We have a five-wave upward trend section, which has taken the form a-b-c-d-e and may already be complete. Because the quotes for the British pound continue to move quite actively away from previously reached peaks, the likelihood of the upward section of the trend being completed is much higher in this case. A European cannot, however, remain frozen in place indefinitely. I believe that it will eventually begin to deteriorate as well. It is challenging to sum up the recent weeks' British news background in a single word because it has been both robust and diverse. The British pound had sufficient justifications at this point to rise and fall. As you can see, it primarily chose the first course of action, but things have since turned around. The demand for the pound has already begun to decline to a greater extent as the market has had enough of buying it. Trading with this tool is now much more effective because the pound's wave marking has been improved.
The pound started constructing a downward wave before 2023 even arrived.
On Thursday, the pound/dollar exchange rate decreased by an additional 45 basis points. Let me remind you that it dropped by 100 the day prior, although there was no news background the day prior, and that yesterday the market was unable to ignore the GDP reports. In other words, the US's third-quarter GDP was 3.2%, while the UK's was -0.3%. I observe that it exceeded market expectations in America while falling short of them in Britain. Thus, the decline in demand for the pound following the release of these data was anticipated. With any news backdrop, the British pound should now fall behind, though, as the wave marking entails the development of a trend-correcting section. And the pound follows the wave analysis.
Although all of the reports that will be released have roughly the same amount of market influence, I'd like to concentrate on American statistics today. I am unable to single out a particular report and declare it to be the most significant. The report on durable goods orders and the index of personal consumption expenditures are both crucial, in my opinion. I believe that the report that falls short of market expectations the most will have a bigger impact. If all of the day's reports meet expectations, it's possible that we won't need to wait for the market's response. However, the downward portion of the trend has already started to take shape, so I anticipate a decline in the British dollar quotes against any news backdrop. I believe that the pound has used up all of its good fortune, and the Bank of England's contradictory actions will further weaken demand for it. Let me remind you that, although inflation is still very high, the British regulator has slowed the increase in interest rates. The recession is regarded as having started when the British economy started to contract in the third quarter.
The construction of a new downward trend segment is still predicted by the wave pattern of the pound/dollar instrument. I can currently recommend sales with targets around 1.1707, or 161.8% of the Fibonacci sequence. Although wave e may still take a longer shape than it does right now, it is most likely finished.
The euro/dollar instrument and the picture look very similar at the larger wave scale, which is good because both instruments should move similarly. Currently, the upward correction portion of the trend is almost finished (or has already been completed). If this is the case, a downward section will likely be built for at least three waves, with the possibility of a decline in the region of figure 15.