The wave analysis for the GBP/USD pair remains relatively clear and, at the same time, remains complex. The construction of a new bearish trend section continues, the first wave of which has become quite elongated. The second wave also turned out to be quite extensive, giving us every reason to expect a prolonged construction of the third wave.
At the moment, I don't know if the construction of wave 2 or b is complete. The retreat of quotes from the peaks reached needs to be bigger 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 is already completed). Nevertheless, we continue to observe the construction of new and new internal waves, which are currently challenging to attribute to any specific wave of a larger scale.
Targets for the pair's decline within the assumed wave 3 or c are located below the level of 1.2039, which corresponds to the low of wave 1 or a. Unfortunately, wave analysis complicates and does not correspond to the news background. At this time, I am not abandoning the working scenario, but we need to continue waiting for when the market will be ready for pound sales.
The GBP/USD pair declined by 30 basis points on Wednesday. Most likely, the decline could have been larger, but the GDP report for the fourth quarter in the United States unexpectedly decided to go against the dollar buyers. The value was below market expectations, which created pressure on the US dollar. However, this is a minor issue. The main thing is that the pound continues to be ignored by the market for both buying and selling. Since December 28, when the construction of wave 3 or c of the bearish trend presumably began, the decline in quotes is 160 basis points. This needs to be more. Even the appearance of the presumed wave 3 or c makes me very doubtful that it is an impulse wave.
I decided to build an auxiliary structure as a descending corridor. This corridor indicates a downward dynamic for the GBP/USD pair. Currently, the pound quotes are near its upper line, so I expect a new decline in the pound. The first target for me is still the 1.25 level. By the time this level is reached, the news background may change, or the market's attitude towards it may change (which I am counting on). I do not see any reason to abandon the working scenario with a decline in the pound. Unfortunately, waves do not always look how you would like them to.
General Conclusions.
The wave pattern 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, as wave 3 or c will sooner or later gain momentum. A successful attempt to break through the level of 1.2627 became a signal for sales. However, at the moment, I can also highlight a new sideways movement with the lower boundary at the level of 1.2500. This level is currently the limit for the decline of the pound. I can also highlight a descending corridor, indicating a preferable decline in quotes.
The picture is similar to the EUR/USD pair on a larger wave scale, but there are still some differences. The descending corrective trend section continues its construction, and its second wave has taken on an elongated form - at 61.8% of the first wave. An unsuccessful attempt to break this level may lead to the start of building wave 3 or c.
