The wave pattern for the Pound/Dollar instrument looks more convincing after making adjustments but still allows for various options. The first option: the construction of a descending set of waves, impulse, continues. Wave 3 or c can take on a five-wave form, and most likely, this is how it will be. The second option: the instrument is within the framework of constructing a structure a-b-c-d-e and at this time the construction of the last wave e continues. In the first case, we will see two more waves of the downward impulse (to complete 3 or c), in the second - within a couple of days the wave e may complete its construction, and the entire downward trend segment may also end with it. Personally, I tend to the first option, which means a further decline in the instrument and the sterling. A successful attempt to break through the 1.3645 mark, which corresponds to 38.2% Fibonacci, will indicate that the markets are ready for a further decline in the instrument.
The news background for the sterling is very weak this week. There were some hopes for yesterday's speech by Jerome Powell, but it did not have a strong impact on the markets. The Fed chairman spoke about the pandemic, the uneven recovery of the US economy, and the uneven pace of recovery of the economies of other countries of the world. According to Powell, this carries risks for the global economy. Powell believes that the entire world should be fully vaccinated before economic activity will fully recover. Also, the Fed chairman praised the pace of recovery in the American economy, high rates of vaccinations in the United States, and very strong support from the state.
However, I would now put in the first place the question: why the sterling and the euro are moving in different directions? If the construction of a new upward trend section has begun for the euro, then for the sterling, the downward trend section continues to be built. Thus, we can assume that the markets react in this way either to a positive news background from the European Union or to a negative one from the UK. However, at this time it is very difficult to find a positive in Europe since the Recovery Fund has not yet been formed, the pace of vaccination leaves much to be desired, and the economy is not recovering due to the new wave of the epidemic. In the case of the UK, everything is much simpler. Its economy is also not in the best condition, but vaccinations are proceeding at a high rate, which gives hope for a quick recovery. However, do not forget about the Brexit factor, which will have a negative impact for a long time. Perhaps the markets have finally realized that the British economy will still be in a recession for a long time, associated exclusively with Brexit, and began to get rid of the rather expensive pound sterling.
At this time, I am still looking to the formation of a downward wave of 3 or c. Thus, I recommend resuming selling the instrument based on the signals of the MACD indicator "down" with targets located near the 35th figure. The second successful attempt to break through the 1.3872 mark, which equates to 23.6% Fibonacci, will most likely require adjustments and additions to the current wave counting and will cancel the option with a decline in instrument quotes.
The part of the trend, originating on September 23, has taken on a five-wave fully completed form. Thus, this section of the trend is presumably completed, and the decline in quotes may resume as part of the construction of a new downward section of the trend, the first two waves of which have already completed their construction.
