The wave marking for the pound/dollar instrument currently appears quite confusing, but it still needs to be clarified. We have a five-wave upward trend section, which has taken the form a-b-c-d-e and may already be complete. As a result, the instrument's price increase may last for a while. Both instruments are still forming an upward trend segment that will eventually lead to a mutual decline. Recently, the British pound's news background has been so varied that it is challenging to sum it up in one word. The British pound had more than enough reasons to rise and fall. As you can see, it primarily chose the first option and still does so today. The internal wave structure of wave e became more complicated due to the rise in quotes the week before last, and it became even more complicated the following week. However, as of this week's first day, the British pound still feels great and has no desire to create a corrective wave. I am currently waiting for the decline of both instruments. Still, these trend sections may take an even longer form because the wave marking on both instruments allows the ascending section to be built up to completion at any time.
The UK currency continues to be in high demand.
The pound/dollar exchange rate on Wednesday increased by 70 basis points. Additionally, the current wave markup is hardly affected by this instrument increase. I previously stated that the British pound's loss of 100 points over the last two days would make it impossible to conclude the end of the anticipated wave e or the entire upward section of the trend. Therefore, the increase today cancels out the dollar's recent gains, which were not even all that convincing yesterday. The instrument is still trading close to its all-time highs, and this week's news environment is very dismal. There was absolutely no news about the British or Americans today or yesterday. This makes the "up-down" alternation quite expected.
The market has already begun preparing for upcoming central bank meetings. I propose we watch the meetings to see what decisions are made. They should be such that the demand for US currency starts to increase based on the current wave markup. And to achieve this, either the Fed's statements and actions should be "hawkish," or the ECB's statements and actions should be "dovish." Such an outcome will only be possible if the ECB and the Bank of England unexpectedly decide against continuing to raise interest rates in 75-basis-point increments. The market acknowledges that there currently needs to be an agreement on this matter and that the rate may increase by three-quarters of a point. If it doesn't, the market may use this as a catalyst to boost demand for the dollar. Additionally, wave analysis supports this.
Conclusions in general
The construction of a new downward trend segment is predicated on the wave pattern of the pound/dollar instrument. Since the wave marking now makes it possible to start building a downward trend section immediately, I can no longer recommend purchasing the instrument. With targets around the 1.1707 mark, or 161.8% Fibonacci, sales are now more accurate. The wave e, however, can evolve into an even longer shape.
The euro/dollar instrument and the picture look very similar at the larger wave scale, which is good because both instruments should move similarly. The upward correction portion of the trend is currently almost finished. If this is the case, a new downward trend will soon develop.