The wave marking looks quite complicated for the pound/dollar instrument but does not require any clarifications. We have a supposedly completed downward trend segment consisting of five waves a-b-c-d-e. If this is true, then a new upward section of the trend has begun. Its first and second waves are presumably completed, and the third wave is being built, which can be both 3 and C. Since the European wave marking has changed, both wave markings now coincide. As I have already said, the upward structure can be limited to only three waves. In this case, the completion of the third wave may occur at any time, after which the construction of a new downward trend section may begin since the peak of this wave is already above the peak of the first wave. And if this wave is c, and not 3, then it should not be extended. Only a small approach above the last peak, which already exists, is enough. We managed to sort out the wave markings, which have recently left many questions unanswered. However, there are still huge doubts that the demand for the British pound will grow for a long time. The instrument retains the possibility of resuming a downward trend segment.
The instrument continues to build an ascending wave 3
The exchange rate of the pound/dollar instrument increased by 30 basis points on November 2, and the overall decline in quotes over the past few days is quite weak. Thus, the instrument reserves the right to resume the construction of the third ascending wave, which does not yet look completed. We are again faced with a situation where the euro and the pound can show different movements for several days, which rarely happens. However, this state of affairs is due to the news background. Let me remind you that the British practically did not react to the ECB meeting last week. Therefore, it would be logical if the Europeans did not react to the meeting of the Bank of England tomorrow. Therefore, this may be the difference between the two tools.
As I said in the euro/dollar review, the Fed's 75 basis point rate hike has already been taken into account by the market. Only if there are "dovish" statements tonight can we expect the US currency to fall. But tomorrow, the market does not yet know what to expect from the British regulator. Most forecasts say that the rate will rise by 75 points there, but if there is a small chance that analysts will make a mistake tonight, then tomorrow, this probability will be higher.
What can we say about Friday, when the market will play two central bank meetings and wait for statistics on the American labor market and unemployment? Let me remind you that recent reports spoke in favor of their excellent condition, and GDP in the third quarter may grow by 2.6%. Thus, few expect Friday's reports to be weak. As a result, we have a situation where many factors speak in favor of increased demand for the US currency, but everything may turn out differently. Otherwise, it turns out too simple. Only a strong decline in the instrument these days will allow us to expect the completion of the upward wave and the entire upward trend section.
General conclusions
The wave pattern of the pound/dollar instrument assumes the construction of a new upward trend segment. Thus, now I advise buying the instrument on the MACD reversals "up" with targets near the estimated mark of 1,1705, which equates to 161.8% Fibonacci. You should buy cautiously, as the trend's downward section may resume construction.
The picture is similar to the euro/dollar instrument at the higher wave scale. The same ascending wave that does not fit the current wave pattern, the same five waves down after it. The downward section of the trend can turn out to be almost any length, but it may already be completed.
