The wave analysis for the pound/dollar pair remains fairly straightforward and understandable. The construction of a new downward trend section continues with its first wave, which is taking a considerable amount of time. In my view, there is no reason for the British currency to resume its ascent, so I am simply not considering a scenario with a new upward section. The first wave of the downward trend section has already taken on an extensive form, but the demand for the pound continues to decline. I remind you that there are no specific target wave sizes. The first wave can continue for as long as it wants, without any limitations.
The internal wave structure of the first wave of the new trend section looks complex, and it is difficult to discern five waves within it. However, five waves can be seen in the euro currency. If the construction of the downward wave set is completed for the euro, then, with an 80% probability, it will also be completed for the pound. However, on Thursday, the pound made a successful attempt to break through the 1.2314 level, which corresponds to 61.8% according to Fibonacci, so it may fall, and the euro made a successful attempt to break through the 1.0637 level, so it may also fall. The construction of correction waves is currently being postponed.
Why buy when you can continuously sell? The pound/dollar pair's exchange rate fell further on Wednesday, losing a few more points following a 30-point drop the day before. Demand for the British currency is declining every day. It is decreasing slowly, not quickly, but this results in a strong downward trend, or more precisely, only its first wave. Today, the pair approached the 1.2115 level, which corresponds to 76.4% according to Fibonacci. A successful attempt to break through, and the pound will continue to decline. An unsuccessful attempt, and the construction of the second corrective wave may begin. I believe that the second scenario is more likely, but it will all depend on the 1.2115 level.
Demand for the pound continues to decline, with or without reasons. Today, from an economic perspective, I can mention the report on core durable goods orders in the USA. Let's be honest; this is not the most important report, and the British pound lost only a few points today. In other words, this report did not trigger a new wave of instrument sales. Nevertheless, order volumes increased by 0.2% in August, while the market expected a decrease of 0.5%. Therefore, even today, the American currency could have deservedly strengthened. It did not happen today, but it does not matter when the instrument has been declining for 3–4 weeks in a row.
Meanwhile, many analysts note that in November, the Bank of England may extend the September pause if inflation does not rise sharply and unexpectedly. The consumer price index remains high, so even in September, the regulator was supposed to raise the rate. Since it did not, it will not tighten without serious reasons in November.
General Conclusions.
The wave pattern of the pound/dollar pair suggests a decline within a new downward trend section. The maximum the pound can expect in the near future is the construction of wave 2 or b. However, even with a corrective wave, there are significant problems. At this time, I would be cautious about staying in sales because an unsuccessful attempt to break the 1.2115 level may indicate the market's readiness to build a correction wave.
On a larger wave scale, the picture is similar to the euro/dollar pair, but there are still some differences. The downward corrective section of the trend continues to be constructed, and its first wave has already taken on an extensive form and is completely unrelated to the previous upward section.