For the pound/dollar pair, the wave analysis remains quite simple and understandable. The construction of a new downtrend segment continues, the first wave of which has taken on a very extended form. In my opinion, the pound has no reason to resume the upward trend segment, so I don't even consider such a scenario. The presumed wave 1 or a is completed. For the euro, wave 2 or b already has a five-wave appearance, for the pound – it has taken on a three-wave appearance. Thus, for both pairs, wave analysis now allows for a resumption of the decline. For the Briton, the structure of wave 2 or b should have taken at least a three-wave appearance to expect its completion for both pairs. Both waves 2 or b have already taken on too extended a form, but if the construction of wave 3 or c begins now or has already started, then everything is in order.
The wave pattern looks good and convincing at the moment. If not for a series of weak reports from the United States in November, most likely, we would have already seen the continuation of the decline in the pair and would have been even more convinced of the transition to the construction of wave 3 or c.
The exchange rate of the pound/dollar pair increased by 25 basis points on Monday. It's a little, but it's an increase on the spot. I remind you that there are no interesting events today and there were none. Based on this, there was nothing to analyze for the market. Since the retreat from the lows of last week is small, it is currently impossible to conclude the completion of the current downward wave or something similar. The wave continues its construction, doing it very slowly. Its size is so small now that there is not even confidence that this is not another correctional wave as part of 2 or b. Theoretically, 2 or b can become even more complex, but it is hardly worth repeating that in this case, it will take an absolutely non-standard form, and I still do not see any grounds for raising the cost of the pound sterling.
What about the analysis for the euro? There, wave 2 or b has already taken on a five-wave appearance, and there is nowhere for it to become more complex. Only if it takes on an unreadable form with a bunch of internal correctional structures. The more complex the wave structure, the more difficult it is to play it out. After all, it's not even about a clear trend that could continue for several months.
Tomorrow may help the market determine a little. In the morning in Great Britain, reports on unemployment and wages will be released. The wage report will be of the greatest importance. The stronger the growth in wages, the weaker the inflation falls. If the slowdown in October is slight, demand for the pound may decrease a little more.
General Conclusions.
The wave pattern of the pound/dollar pair suggests a decrease within the downtrend. At the moment, I can recommend selling the pair with targets below the level of 1.2068 because wave 2 or b must ultimately be completed and can be completed at any time. And the longer it turns out, the stronger the fall of the Briton will be. The narrowing triangle is a precursor to the completion of the movement.
On a larger wave scale, the picture is similar to the euro/dollar pair, but there are still some differences. The descending correctional segment of the trend continues its construction, and its second wave has already taken on an extended form – at 61.8% from the first wave. An unsuccessful attempt to break this level may lead to the start of building 3 or c.