The wave markup for the pound/dollar instrument currently appears rather complex, but it also doesn't call for any explanations and starts to diverge dramatically from the markup of the euro/dollar instrument. Our five-wave rising trend segment has the form a-b-c-d-e and is most likely already finished. Since there has been a very active departure of quotes from previously reached highs in recent weeks, the likelihood of the British pound completing the upward trend segment has increased noticeably. As a result, I can say that the downward part of the trend has started to take shape and will include at least three waves. And the rise in the instrument's quotes during the previous two days might represent wave b in this part of the trend, which can take either a five-wave or a five-wave pulse form. However, the drop of the British should continue because there has only been one downward wave created thus far, and it has not been in the strongest or most compelling shape. Naturally, the rising portion of the trend can continue for an indefinite amount of time and have any duration. This situation, however, is not a typical one. I continue to attempt to expand upon the conventional wave structures, which can be utilized for both work and prediction.
The British pound will not receive much news this week.
On Tuesday, the pound/dollar exchange rate decreased by 30 basis points. After a remarkable increase of 280 points, it was thought that prices would begin to decline from their highs. Everything appears to be pretty convincing from the perspective of wave marking, but for at least one more downward wave to be formed, the market needs to enhance demand for US money. I think that the UK's recent news background could result in a decline in demand for the pound. Recently, speculation about a potential US recession has diminished, and speculation about a potential EU recession is also starting to wane. Since the majority of analysts think that the recession has already started and that the issues in the British economy will only get worse, the British pound has not yet been supported by such a factor.
This week in America, there is only one report on inflation, but the market is gradually losing interest in these studies. Although we are aware of the Fed's rate plans, inflation remains a crucial report for monetary policy. In the UK, a lot will depend not on the Bank of England or inflation any longer, but rather on how severe the GDP decline will be during the next few months. The markets are anticipating negative values for November as they await the release of the upcoming data on economic growth on Friday. Though the GDP reductions are slight, it is still too soon to start panicking. Although it may be able to prevent a major decline, the British economy is still in the highest danger area. Recently, there has been a lot of discussion about this among specialists, with the expectation of the highest reduction among the G-7 nations. Among the major central banks of the world, the Bank of England is now expected to take the most "soft" approach in terms of rate increases.
Conclusions in general
The building of a downward trend section is still assumed by the wave pattern of the pound/dollar instrument. Currently, sales with objectives at the level of 1.1508, or 50.0% Fibonacci, might be taken into account. The upward portion of the trend is probably over; however, it might yet take a longer form than it does right now.
The euro/dollar instrument and the picture seem extremely similar at the larger wave scale, which is fortunate because both instruments should move similarly. Currently, the upward correction portion of the trend is almost finished. If this is the case, a downward section will likely be built for at least three waves, with a potential decline in the vicinity of the 15th figure.
