The wave analysis of the GBP/USD pair is unexpectedly changing its appearance to a simpler and more understandable one. We can see an impulsive ascent instead of a complex corrective phase of the trend. The presumed wave 2 or b may have completed its formation last week. If that's the case, forming an ascending wave 3 or c is now in progress, and the British pound has an excellent opportunity to rise to the 1.30 level. It is up to you to decide whether the current news background justifies this. The British pound has no grounds to continue rising to the 1.30 or 1.35 level (which is possible if it is an impulsive phase of the trend). Wave 2 or b will not take on a more complex form. Wave analysis can always transform into a more complex one, but I prefer to rely on its simple manifestations as they are easier to forecast.
The wave analysis of the EUR/USD pair differs from that of GBP/USD. A descending wave structure is expected for the euro, and the hypothetical complexity of the ascending trend phase is currently unlikely. On the other hand, everything suggests that the British pound is in a new ascending trend phase, which opens up excellent prospects. This phase may be shortened, consisting of three waves, and wave 3 or c could even complete today. But this scenario is a reserved one.
The British pound is rising without the support of the news background.
The GBP/USD pair rose by another 50 basis points on Friday after increasing by 120 points on Thursday. I want to remind you that yesterday there were dubious reasons for the pound to rise, and today there were none. Nevertheless, the market continues to increase its purchases. Yesterday, several reports from the US, some of which turned out to be weaker than market expectations, could not trigger such extensive selling of the US dollar. The ECB meeting no longer relates to the pound since the UK has left the European Union. Therefore, the pound is rising on market sentiment alone. Today, there was no news in the UK, and the only consumer sentiment index in the US, which was released a couple of hours ago, could not cause new dollar sell-offs during the day.
Next week, the Bank of England's meeting is scheduled, and markets expect another rate hike. I believe the Bank of England is close to the end of the rate hike cycle. However, some analysts have discussed the rate rising to 5.5-5.75% this year. This is impossible, but the market believes in such a scenario. Otherwise, how can we explain the constant rise of the pound? An unsuccessful attempt to break through the 1.2838 level, which corresponds to 161.8% Fibonacci retracement, can push the pair down or lead to the completion of wave 3 or c. A successful break would indicate the market's readiness for a new increase in demand.
The wave pattern of the GBP/USD pair has changed and now suggests the formation of an ascending wave, which could complete at any moment. At the moment, I would not rush with purchases based on the analysis conducted. I recommend selling in case of an unsuccessful attempt to break through 1.2838.
The picture is similar to the EUR/USD pair on a larger wave scale, but there are still some differences. The descending corrective phase of the trend has been completed, and the formation of a new ascending phase is ongoing, which could complete as early as tomorrow or develop into a full five-wave structure. The third wave could be lengthy or shortened, even if it takes on a three-wave form.