FX.co ★ Analysis of GBP/USD. November 13th. The pound may receive market support on Tuesday

The wave analysis for the pound/dollar pair remains quite simple and clear. The construction of a new downward trend section continues, the first wave of which has taken on a rather elongated form. I believe there is no basis for the pound to resume the upward trend section, so I do not even consider such a scenario. The presumed wave 1 or a is complete. For the euro, wave 2 or b already has a five-wave structure, while it has taken on a three-wave form for the pound. Thus, the wave analysis for both pairs currently allows for a resumption of the decline. This is the moment I was waiting for. For the pound, the structure of wave 2 or b should have taken on a minimum three-wave form.

Despite the pound being on the verge of canceling the scenario with the construction of wave 2 or b for two weeks, the wave pattern now looks good and convincing. Therefore, a quote decline may begin soon or have already started. The presumed wave 3 or c could be very prolonged. The 17–18 figures are its minimum target.

Salaries in Britain may fall in September.

The exchange rate of the pound/dollar pair increased by ten basis points on Monday. Such a movement is not worth analyzing. I mentioned that the trading amplitude was minimal on Friday, and it was practically zero today. Thus, there is a continued departure of quotes from previously reached highs, which could be the first internal wave as part of 3 or c. At least, the current wave analysis allows us to consider this scenario confidently. What was interesting today in the USA and Britain? Nothing! I am surprised that the market is simply resting and waiting for reports and news.

And reports and news will start coming in tomorrow. The UK's unemployment rate and wage changes will be released in the morning. In the USA, an inflation report for October will be released after lunch. These three reports could change market sentiment and encourage more active trading. An increase in unemployment can be expected to reach 4.4%. From wages - a slowdown in growth to 7.4%. And from US inflation - a slowdown to 3.3%. How can the market react? A decreased inflation in the USA is a "bearish" factor for the dollar. A decrease in the pace of wages in Britain is a "bearish" factor for the pound. Tomorrow, there will be no advantages for either buyers or sellers. However, it is also important how market expectations will align with reality. No forecasts can be made here; we must wait for the reports. The pound may grow a little tomorrow, but it will not change the current wave pattern, and then a decline in the pair will resume. For now, I do not consider the option of a more complex wave 2 or b.

General conclusions:

The wave pattern of the pound/dollar pair suggests a decline within the descending trend section. The maximum the pound can expect is a correction. At this time, I recommend selling the pair with targets below the 1.2068 mark because wave 2 or b has ultimately taken on a convincing form and is likely completed. Initially, sales should be insignificant because there is always a risk of complicating the existing wave.

The picture is similar to the euro/dollar pair on a larger wave scale, but there are still some differences. The downward corrective section of the trend continues its construction, and its first wave has already taken on an elongated form and has no relation to the previous upward section.