For the GBP/USD pair, the wave pattern remains relatively simple and clear. The construction of an upward wave 3 or c has been completed, and a new downward segment of the trend has begun, which could theoretically still be the fourth wave. I believe the British currency has no reason to resume its rise (and many reports and events support my opinion). Yet, the wave pattern has transformed into something more complex, and wave 3 or c took a more extended form than many analysts expected a few months ago. The entire upward segment of the trend could take a five-wave form if the market finds new reasons for long-term purchases.
In any case, I expect the continuation of the construction of a descending wave, which started almost precisely on schedule. Even if this is the fourth wave within the ascending set of waves, it should be extended or distinctly three-wave. Three waves are already traced within it, but if the current wave is the fourth, we should get clear signals about the market's readiness to buy. If the current wave takes a five-wave internal structure, it can be considered the first impulse, and further falling of the pound can be expected.
The 1.2616 mark held the pound from falling.
The GBP/USD rate dropped by 15 basis points on Wednesday. There was no news background again today, and the movement in recent days is also horizontal, as with the EUR/USD pair. Consequently, the market has truly fallen into a slumber, or in the language of the Federal Reserve, taken a pause. The second half of the week should be more interesting for the pair and may determine its further perspective for the next several days and weeks. Let's return to the wave pattern. It admits a new ascending wave and a new descending one with equal probability. It still needs to be determined whether the upward trend segment has been completed and what wave is currently being built. It could be a corrective wave d or the first wave of a new downward trend segment.
The news background no longer supports the British currency as it did a few months ago. Although the Fed has already taken a time-out once and may take another in September, the market tends to anticipate many factors in advance. As the saying goes, "Buy on rumors, sell on facts." And since the pound has been actively growing all last year, the market bought on all the rumors it could gather. Even if the Bank of England raises the interest rate several times, the demand for the pound will remain the same. At least, I don't believe so. A fall in the pair's quotes is more likely.
The wave pattern of the GBP/USD pair suggests a decline. Since the attempt to break through the 1.3084 mark (from top to bottom) was successful, my readers could have opened sell positions, which I discussed a few weeks ago. The target was the 1.2618 mark, and it has been successfully reached. There's a risk of the current downward wave ending if it truly is wave d. In this case, a new increase within the framework of wave 5 will start from the current levels. This isn't the most likely scenario; a successful attempt to break through 1.2616 (or an unsuccessful one at 1.2840) will indicate the market's readiness to continue the construction of the downward wave.
The picture is similar to the EUR/USD pair on a larger wave scale, but some differences remain. The downward corrective segment of the trend has ended, and the construction of a new upward segment is underway, which might already be complete or take a full five-wave form.