For the pound/dollar instrument, the wave marking looks quite complicated but does not require any clarifications. We have a supposedly completed downward trend segment consisting of five waves (a-b-c-d-e). We also have a five-wave upward trend section, which took the form a-b-c-d-e. Thus, the increase in the instrument's quotes may continue for some time, but it will be a wave of growth that is unlikely to last. The news background could have been interpreted in any direction lately, as both central banks raised their interest rates, and the Friday before last, we saw a drop in the dollar against the news background, which could lead to its new growth (Nonfarm Payrolls report). All this leads me to believe that the market has decided to complete a full-fledged five-wave structure, after which it will decide on building a new downward trend section. A successful attempt to break through the 1,1704 mark, which equates to 161.8% by Fibonacci, indicates the incompleteness of the upward trend section, but in general, the wave structure looks fully equipped.
The week started calmly, but the instrument began to grow again.
The exchange rate of the pound/dollar instrument decreased by 35 basis points on November 14. There was no background news on the first day of the week, so the instrument's amplitude was rather weak. At the same time, demand for it is staying the same, which would be expected after a strong increase last week. However, the market still needs to be ready to reduce demand for the pound, although the current wave marking for the pound not only completely coincides with the wave marking for the euro but also looks complete.
However, from time to time, we have to face such situations when everything seems to be in favor of moving in one direction, but the instrument is moving in the other. Therefore, I do not advise buying now since the current wave marking involves building at least three waves down. Of course, any section of the trend can take a more complex form at any time, which is the disadvantage of wave analysis. At the same time, I am interested in the structures by which you can trade and earn. And it is difficult, and sometimes impossible, to foresee when this structure will begin to lengthen. For example, now waves b, c, d, and e are almost the same size, suggesting that the last wave cannot be too long. There won't be any super important economic events this week that could dramatically boost demand for the British. But at the same time, if the market continues to buy, the wave e can take any length. Therefore, it is possible to buy, but it is dangerous. Of the interesting events this week, I first highlight the report on British inflation, which will be released on Wednesday. Moreover, he will notify the markets that consumer prices continue to rise despite eight rate hikes by the Bank of England.
General conclusions.
The pound/dollar instrument wave pattern assumes the construction of a new downward trend segment, but it will probably start a little later (if it starts at all). I can only recommend buying the instrument after the wave marking allows the beginning of the construction of a downward trend section. The demand for the pound is still growing, but the wave e will not take on an extended form.
The picture is very similar to the euro/dollar instrument at the higher wave scale, which is good since both instruments should move similarly. At this time, the upward correction section of the trend is nearing completion. If this is the case, we will soon be building a new downward trend.
