The wave analysis for the GBP/USD pair still looks complicated because it does not look like a classic corrective or impulsive segment of the trend. Since the current upward wave went beyond the peak of the last wave b, the entire downward segment of the trend, consisting of waves a-b-c, can be considered complete. Although it weakly resembles the trend segment for the same period in the euro currency's performance, it must be acknowledged that both pairs have built descending three-wave sets of waves. If this assumption is correct, a new upward trend segment has begun for the pound. Since I can only single out one wave starting on March 8, forming a new trend segment will take a long time. Both pairs should build similar wave formations. If this is indeed the case, wave 2 or b for the pound may be extended, and at the same time, a descending three-wave set may be built for the euro. Thus, I expect a deep wave b, as in the case of building the previous three-wave set. Therefore, it is possible to expect a decline in the pair to the 1.1850 mark or slightly higher. However, at the moment, wave 1 or a is getting more complicated again.
The pound was delighted with an unexpected gift.
The GBP/USD exchange rate fell by 50 basis points on Monday. Much of this decline was due not to the US manufacturing activity indices but to the fact that the pound had risen sharply on Friday. And after a strong increase, a correction should follow. Therefore, the decline in the pair's quotes began at night, and the ISM index only confirmed that the market was acting correctly. The market had no solid reasons to increase demand for the pound on Friday. Economic statistics were pretty good for the dollar. However, the Fed and Bank of England meetings are approaching, and the market is starting to play out the future decisions of central banks, still waiting to learn them.
This week in the UK, there will again be very few events. Only business activity indices and nothing more. There will be a Fed meeting in the US with minimal intrigue and more interesting reports on unemployment and the labor market. The most exciting and strong movements should be expected on Friday. The pair should have declined long ago if we rely on wave analysis. Therefore, I will be waiting for news supporting the dollar this week. This is quite possible since the demand for the pound has been high for the past few weeks but does not increase. The pair is practically not growing but not falling either. This cannot continue for long. Sooner or later, patience will run out. And the pound needs new reasons to continue rising. They are likely to appear after the Bank of England meeting.
The wave pattern of the GBP/USD pair has long assumed the formation of a new downward wave. The wave analysis, as well as the news background, is somewhat unambiguous. I do not see factors supporting the pound in the long term, and wave b could be very deep, but it has yet to start. A decline in the pair is more likely now, but the first wave of the ascending segment continues to complicate, and quotes have moved away from the 0.0% Fibonacci mark. It will be more difficult to determine the beginning of wave b formation.
The picture is similar to the EUR/USD pair on the older wave scale, but there are still some differences. At the moment, the upward corrective segment of the trend is completed. But the three-wave descending segment may also be completed already. And the new upward trend segment can also be three-wave and horizontal.