For the GBP/USD pair, the wave analysis remains quite understandable and, at the same time, remains complex. The construction of a new downtrend segment continues, the first wave of which has taken on a very extended form. The second wave has also turned out to be quite prolonged, giving us every reason to expect the long-term construction of the third wave.
At the moment, I am not fully confident that the construction of wave 2 or b is complete. The retreat of quotes from the reached 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 form, but it remains corrective and should be completed soon (or may already be completed). Nevertheless, we continue to observe the construction of new and new internal waves, which are currently very difficult to relate to any specific wave of a larger scale.
Targets for lowering the pair within the presumed wave 3 or c are below the level of 1.2039, corresponding to the low of wave 1 or a. Unfortunately, wave analysis tends to be complicated and does not correspond to the news background. At the moment, I do not abandon the working scenario; a successful attempt to break through the 38.2% Fibonacci level indicates the market's readiness to sell the British pound.
An important level for the British pound
The exchange rate of the GBP/USD pair did not change on Monday. The news background for the British pound today was the same as for the euro. That is, none. In America, President's Day was celebrated, and in the UK, all the most interesting news and data came out last week. And they did not clarify the current wave picture or the overall market situation in any way. For the British pound, at the moment, the same wave 3 or c should be built as for the euro. However, there is a feeling that the pound has moved from a narrow sideways range to a wider one. Now, all movements take place between the levels of 50.0% and 23.6% Fibonacci, and nothing else has changed.
If last week, with the strongest news background, the situation did not change, then there are even fewer chances to see real changes this week. I can now highlight only one point that can help my readers. The pair approached the 38.3% Fibonacci level, which is equivalent to 1.2627 and can be considered the approximate middle of the horizontal corridor. An unsuccessful attempt to break through may indicate sellers' readiness to make a new attempt to lower to the level of 1.2468. For now, I see only this potential signal.
General conclusions.
The wave picture of the GBP/USD pair still suggests a decline. At the moment, I am considering selling the pair with targets below the level of 1.2039 because wave 2 or b cannot last forever, just like the sideways range. A successful attempt to break through the level of 1.2627 became a signal for sales. Another signal was formed this week in the form of an unsuccessful attempt to break through this level from below. Now, I have some confidence in the decline of the pair, at least to the level of 1.2468, which will already be a huge achievement for the dollar, whose demand remains low despite everything.
On a larger wave scale, the picture is similar to the EUR/USD pair, but there are still some differences. The descending corrective segment of the trend continues its construction, and its second wave has taken on an extended form – at 61.8% of the first wave. An unsuccessful attempt to break through this level may lead to the beginning of the construction of wave 3 or c.
