For the pound/dollar pair, the wave analysis remains quite simple and clear. The construction of a new downward trend continues, and its first wave has taken a rather prolonged form. There is no reason for the British currency to resume the upward trend, so I do not even consider such a scenario. The assumed wave 1 or a is complete. For the euro, wave 2 or b already has a five-wave form, while for the pound, it has taken a three-wave form. Thus, for both pairs, wave analysis allows for a resumption of the decline. This is the moment I was waiting for. Wave 2 or b should have taken a minimum three-wave form for the British pound.
The wave pattern currently looks good and convincing. If not for the US inflation report last week, we would have seen a continuation of the decline in the pair and become even more convinced of the transition to wave 3 or c construction. And now, wave 2 or b may take a more complex form. US statistics this month have been very disappointing, causing the construction of the corrective wave to drag on.
Business activity indices are unable to influence the pound significantly.
The pound/dollar pair rate increased slightly on Monday. The last peak has been updated, but wave 2 or b construction may be completed at this point. As I have already said, this wave can take any form of complexity and length, like any other wave. Accordingly, it is possible to expect an increase in the British pound even to the 31st figure. However, if such conclusions are drawn, wave analysis becomes useless, as any wave can be longer, shorter, more complex, or simpler than its "classic" form described in any textbook.
Today, the news background in the UK and the US was not weak; it was simply absent. The market is resting, and while resting, it does not forget to increase demand for the British pound slightly. There are no clear reasons to do so now, so I still expect a decline in the pair. But only some things depend on the news background and economic reports. For the British pound, if it so passionately wants to continue the rise, new reasons to grow are needed now. This week, we are only waiting for the usual business activity indices in the US and the UK and a fairly important report on durable goods orders in America. This week's news background will be weak, but if the British pound can rise even in such conditions, it will be possible to conclude that the markets are ready to continue buying up to the 31st figure. I would certainly avoid such a scenario, but it is possible.
General conclusions.
The wave pattern of the pound/dollar pair suggests a decrease within the descending trend. The maximum that the British pound can count on is a correction. I recommend selling the pair with targets below the 1.2068 mark because wave 2 or b will eventually be completed. Initially, sales should be insignificant because there is always a risk of complicating the existing wave.
The picture is similar to the euro/dollar pair on a larger wave scale, but there are still some differences. The descending corrective segment of the trend continues its construction, and its first wave has already taken a prolonged form and has nothing to do with the previous upward trend.
