The wave analysis remains simple and understandable for the pound/dollar pair. The construction of a new downtrend segment continues, the first wave of which has taken a quite extended form. The pound has no grounds to resume the upward trend segment, so I don't consider such a scenario. The presumed wave 1 or a is completed. For the euro, wave 2 or b already has a five-wave structure, while it has taken a three-wave form for the pound. Thus, for both pairs, wave analysis currently allows for the resumption of the decline. For the pound, wave 2 or b's structure should have taken at least a three-wave form to expect its completion for both pairs. Both waves 2 or b have already taken too extended forms, but if the construction of wave 3 or c begins now or has already begun, then everything is in order.
The wave picture currently looks good and convincing. If not for a series of weak reports from the United States, we would have seen the continuation of the pair's decline and become even more convinced of the transition to the construction of wave 3 or c.
The pound is very reluctant to return to the 20th figure.
The pound/dollar pair's rate increased by 25 basis points on Thursday morning. There needs to be more to talk about the formation of an upward wave or the completion of a downtrend. Nevertheless, the pound has slightly increased in price, and there was no news background in the morning for such a market reaction. We will likely see a regular technical rollback, after which the pair's decline should resume.
However, the pound is declining very slowly and reluctantly. It is evident that the market is not rushing with sales and is waiting for some news to resume purchases. However, there may be no such news, but there is news that works against the pound. Just yesterday, Andrew Bailey announced that the interest rates of the Bank of England will not increase. Most likely, he meant the next few meetings, as it is not worth making longer-term forecasts now. The Monetary Policy Committee agrees that inflation may still bring an unpleasant surprise, forcing the regulator to raise rates. However, without a serious and uncontrollable rise in inflation, there will be no policy tightening.
Undoubtedly, this news is negative for the pound. Perhaps the market was counting on the Bank of England to raise rates again, and now it doesn't know what to do next. Tomorrow, unemployment and payrolls in the United States may support the dollar, not the pound. Based on the above, I propose to rely on the wave analysis now, which suggests a decline in the pair. I still don't see compelling reasons to increase demand for the pound.
General conclusions:
The wave picture of the pound/dollar pair suggests a decline within a descending trend segment. At this time, I recommend selling the pair with targets below the 1.2068 mark because wave 2 or b must eventually be complete, and it can end at any moment. The longer it takes, the stronger the pound's decline will be. The contracting triangle is a precursor to the completion of the movement.
The picture is similar to the euro/dollar pair on the larger wave scale, but there are still some differences. The descending correctional trend segment continues its construction, and its second wave has already taken an extended form – at 61.8% from the first wave. An unsuccessful attempt to break through this mark may lead to the beginning of the construction of 3 or c.