The wave analysis of the pound/dollar pair has changed its appearance to a simpler and more understandable. Instead of a complex correctional trend segment, we can see an impulsive ascending or a simpler corrective one. The formation of the ascending wave 3 or c is ongoing, and the pound has an excellent opportunity to grow to the 30th figure. The pound has no basis for continuing to rise (and many reports and events confirm my opinion), and the supposed wave 3 or c might have already ended. However, the wave pattern has become more complicated, and wave 3 or c has become more elongated.
A descending wave set is expected for the euro currency, but the wave pattern can still transform to be similar to the pound. Then the patterns will become virtually identical. Inside wave 3 or c, a five-wave structure (or a wedge-shaped structure a-b-c-d-e could be formed), implying at least one more wave up. The news background now diverges from the wave picture, which could be clearer.
The British statistics were unambiguous
The pound/dollar pair rate increased by 20 points on Monday and another 40 today. The pair's increase wasn't strong, but a successful attempt to break the 1.2842 mark allowed the third wave to lengthen and take a much more extended form. This scenario implies that the demand for the pound will continue to grow, and the dollar - to fall. And everything would be fine if the news background didn't tell us the opposite. I already wrote that Friday's Nonfarm Payrolls report in the USA needed to be better for the dollar demand to drop sharply. Yesterday there were only a few important events. This morning, three reports were released in the UK, which was supposed to cause a decline in the pound, but they triggered its new growth.
Unfortunately, some economists are not analyzing but searching for explanations. The pound prompts them to do this because explaining its movements becomes harder and harder each day. Today it became known that the unemployment rate in the UK rose and rose stronger than the market expected. The number of unemployment benefits claims, instead of dropping by 22,000, increased by 25,000. Wages in May increased by 6.9%, which also did not meet market expectations. At the same time, the demand for the pound continued to increase. Experts explained such a market reaction with the wage report, which supposedly can force the Bank of England to continue raising the rate. But the Bank of England is already raising it; what about the negative reports on unemployment?
General conclusions.
The wave picture of the pound/dollar pair implies the formation of a rising wave set. Earlier, I recommended buying the pair in case of an unsuccessful attempt to break the 1.2615 mark, equivalent to 127.2% Fibonacci. A successful attempt to break the 1.2842 mark indicates the complication of the ascending wave 3 or c. Therefore I continue to advise purchases with targets located around 1.3084, which corresponds to 200.0% Fibonacci.
The picture resembles the euro/dollar pair on the older wave scale, but some differences exist. The descending correctional trend segment is completed, and the formation of a new, ascending one is ongoing, which could be already finished, or could take a full-fledged five-wave form. And even if it takes a three-wave form, the third wave could become elongated or shortened.
