FX.co ★ GBP/USD. Analysis for February 29th. The pound can't do anything against the circumstances

Regarding the GBP/USD pair, the wave analysis remains quite clear and, at the same time, remains complex. The construction of a new downtrend section continues, the first wave of which has a very elongated shape. The second wave also turned out to be quite prolonged, giving us every reason to expect the long construction of the third wave.

At the moment, I am not confident that the construction of wave 2 or b is complete. The retracement of quotes from the achieved peaks is too small to consider it a guaranteed start of wave 3 or c. Wave 2 or b has already taken on a five-wave form, but it remains corrective and should be completed soon (or is already completed). Nevertheless, we continue to observe the construction of new internal waves, which are currently very difficult to attribute to any specific wave of a larger scale.

Targets for the pair's decline within the presumed wave 3 or c are located below the 1.2039 mark, corresponding to the low of wave 1 or a. Unfortunately, the wave analysis is complicated and does not correspond to the news background. I do not reject the working scenario at the moment, and the descending corridor indicates a slight but still decreasing demand for the pound.

The decline of the pound is too complicated

The exchange rate of the GBP/USD pair remained unchanged on Thursday at the time of writing the review. As in most cases before, during the day, we saw movements in different directions that did not allow the dollar or the pound to grow. The pair's rate remains near the upper line of the corridor, which logically should lead to its decline soon. However, no matter what factors and types of analysis I use, the pound is very reluctant to move downward.

Today, it has reasons for a decline. Economic statistics in Germany turned out to be weak; inflation in Germany was weaker than expected, and tomorrow, inflation in the EU may also be weaker. What does the pound have to do with it? The euro and the pound often correlate with each other. There is almost no correlation recently, but it is still possible within one day. Today, the euro fell, and the British pound could do the same.

However, during the American session, reports that did not support the dollar either came out. Personal income of American consumers increased by 1%, and spending - only by 0.2%. This means that Americans started spending less, inflation may slow down, and the Federal Reserve may move faster to lower interest rates. Therefore, in the second half of the day, the market practically did not sell the pound, although it could

General conclusions

The wave picture of the GBP/USD pair still suggests a decline. At the moment, I am considering selling the pair with targets below the 1.2039 mark because wave 3 or c will sooner or later gain momentum. A successful attempt to break through the 1.2627 mark became a signal for sales; however, at the moment, I can also highlight a new sideways movement with the lower boundary at the 1.2500 mark. This mark is currently the limit for me in the pound's decline. I can also highlight a descending corridor, indicating the preferred decrease in quotes.

The picture is similar to the EUR/USD pair on a larger wave scale, but there are still some differences. The descending corrective section of the trend continues its construction, and its second wave has acquired an elongated shape - at 61.8% of the first wave. An unsuccessful attempt to break this mark may lead to the start of the construction of 3 or c.