The wave analysis for the GBP/USD pair still looks complicated because it does not look like a classical corrective or impulsive section of the trend. Since the current upward wave has exceeded the peak of the last wave b, the entire downward section of the trend, consisting of waves a-b-c, can be considered complete. However, it is very weakly similar to the trend section for the same period in the performance of the euro currency, both pairs built descending three-wave sets of waves.
Therefore, a new upward section of the trend continues for the pound. Since, starting from March 8, I can only single out one wave of the current scale, there is every reason to assume that forming a new trend section will take a long time. Both pairs should build similar wave formations. If this is indeed the case, then wave 2 or b for the pound may be prolonged, and at the same time, a descending three-wave formation may be built for the European currency. Thus, I expect a deep wave b, as in the case of building the previous three-wave formation. Therefore, a decrease in the pair can be expected to the 1.1850 mark or slightly higher. However, at the moment, wave 1 or a continues to complicate.
The pound takes full advantage of opportunities.
The GBP/USD pair's rate increased by 75 basis points on Friday and Monday. This is not the strongest growth that could have been, but it occurs when, for example, the EUR/USD pair is moving horizontally. I have already said that both pairs very often show similar dynamics, and I see no reason why it should be different now. Nevertheless, demand for the pound increased again on Friday, and for the euro currency – it did not, although the news background was the same for both pairs. From this, I can conclude that the market has already begun to play out the future Bank of England meeting and its results, which will become known this Thursday.
There are two possible scenarios. In the first one, the Bank of England will raise the rate by 25 basis points, as the market expects now. This is a "hawkish" decision, so it is not excluded that the pound is currently increasing due to it. But in this case, on Thursday, the market will have nothing to play out, and the Bank of England itself is on the verge of completing the process of tightening monetary policy. In the second case, the Bank of England will take a break, which may surprise the market. Since such a decision will be "dovish," there may be a decrease in demand for the pound and a significant drop in the pair.
Even today, the pound has risen slightly despite no news background. The formation of a corrective downward wave should have started long ago.
General conclusions.
The wave pattern of the GBP/USD pair has long implied the formation of a new downward wave. The wave analysis, as well as the news background, is somewhat unambiguous now. I do not see factors supporting the pound in the long term, and wave b can be very deep, but it has yet to start. A decrease in the pair is more likely now, but the first wave of the ascending section continues to complicate; the quotes have moved away from the 0.0% Fibonacci mark. Now it will be more difficult to determine the beginning of the formation of wave b.
The picture is similar to the EUR/USD pair on the older wave scale, but there are still some differences. At the moment, the ascending corrective section of the trend is complete. But the three-wave descending section may also be completed. And the new ascending section of the trend can also be three-wave and horizontal.
