The wave analysis for the pound/dollar pair remains relatively clear and, at the same time, continues to become more complex. The construction of a new downtrend segment is ongoing for the pound/dollar pair, and its first wave has taken on a considerable length. The second wave has also become quite extensive, providing grounds to expect a prolonged development of the third wave.
At the moment, I am not confident that the construction of wave 2 or b is complete. The retracement from the peaks is too small to consider it a guaranteed start of wave 3 or c. Wave 2 or b has already taken on a five-wave structure, yet it remains corrective and is expected to conclude soon (or may have already concluded). Nevertheless, we continue to observe the formation of new internal waves, making it challenging to attribute them to any specific higher-scale wave.
Targets for the pair's decline within the presumed wave 3 or c are set below the level of 1.2039, corresponding to the low of wave 1 or a. Unfortunately, wave analysis tends to become more complex, and the news background only sometimes aligns. I do not dismiss the working scenario at this time, but a few unsuccessful attempts to break the 38.2% Fibonacci level indicate the market's reluctance for sales right now.
The FOMC meeting is unlikely to end the sideways movement for the British pound. The Pound/Dollar pair increased by only a few basis points on Wednesday. In the first half of the day, we witnessed a decline in demand for the pound, but in the second half, the demand for the dollar dropped. With no news in the UK today, the morning decline in the pound was technical. However, it was so minor that it should not be considered. Every day, we observe such movements in the pound that do not affect the fact that the pair is still trading in a horizontal channel.
The situation changes during the American session. During this period, only one ADP report was released in the US, but it disappointed the markets so much that the dollar rapidly lost ground. The value of this report was not weak enough to bury the dollar before the FOMC meeting. The number of new jobs was slightly below market expectations, about 20-30, which is an acceptable deviation. In any case, Nonfarm Payrolls, which hold much greater significance for the market and the US currency, will be released on Friday.
Considering all of the above, I cannot add anything to the current wave analysis or provide any new perspectives on the market. The sideways movement persists, and even tonight, sellers may need to be more active to execute a successful attempt to break the level of 1.2627.
General Conclusions:
The wave pattern for the pound/dollar pair suggests a decline. At this time, I am considering selling the pair with targets set below the level of 1.2039 because wave 2 or b must eventually conclude and may do so at any moment. However, as we currently observe only horizontal movement, I still advise against rushing with sales. I am awaiting a successful attempt to break the level of 1.2627, after which believing in further decline of the pair will become much easier.
The pattern resembles the euro/dollar pair on a larger wave scale, but there are still some differences. The descending corrective segment of the trend continues its development, and its second wave has taken on an extended form – at 61.8% of the first wave. An unsuccessful attempt to break this level may lead to the beginning of constructing wave 3 or c.
