The wave markup for the GBP/USD pair looks complicated because it does not look like the trend’s classical correction or impulse section. Since the current upward wave has exceeded the peak of the last wave b, the entire downward trend section, consisting of waves a-b-c, can be considered complete. Although it hardly resembles the trend section for the same period in the euro’s performance, it should be recognized that both pairs have built downward three-wave sets of waves.
If this assumption is correct, a new upward trend has begun for the pound. Since I can single out only one wave from March 8, there is every reason to assume that forming a new trend section will take a long time. Both pairs should build similar wave formations. If this is indeed the case, wave 2 or b for the pound may be extended, and at the same time, a downward three-wave pattern can be built for the euro. Thus, I expect a deep wave b, as with the previous three-wave pattern. Therefore, the pair’s decline can be expected to reach the 1.1850 mark or slightly higher. However, at the moment, wave 1 or a continues to become more complex.
The British currency made the most of the news background.
The GBP/USD pair rate rose by 100 basis points on Thursday. And it covered this distance upwards throughout the day before the FOMC meeting results. As I have already said, at least two important reports were released in America during the day, each of which supported the US currency. But the market did not pay attention to them, anticipating Powell’s statement about stopping the interest rate hike. He did not wait for the statement but didn’t roll back down because of it. Thus, the British currency showed its cunning in all its glory: it grew on a temporary factor and ignored all the real ones.
Today, the ECB announced an increase in all rates by 25 basis points, causing the euro to fall. However, the British currency pretended that this decision had nothing to do with it, although it had repeatedly followed the euro like a dog before. But today, it dropped only a couple of basis points. As a result, the British currency updated its last peak again, and the presumed first wave took an even more extended form. In recent weeks, the British currency has been barely growing, but it is still growing. The news background allows the market to increase demand for the US currency, but this is not happening. Analysts try their best to explain what is happening in the market, but it needs to be more convincing.
General conclusions.
The wave pattern of the GBP/USD pair has long suggested the formation of a new downward wave. The wave markup, as well as the news background, is somewhat unambiguous. I do not see factors that would support the British currency in the long term, and wave b can turn out to be very deep, but it has yet to start. A decline in the pair is more likely now, but the first wave of the ascending section continues to become more complex, and the quotes have moved away from the 0.0% Fibonacci level. Now it will be more difficult to determine the beginning of the formation of wave b.
The picture is similar to the EUR/USD pair at the senior wave scale, but there are still some differences. At this time, the ascending correction section of the trend is complete. But the three-wave downward section may already be completed as well. And the new upward trend section can also be three-wave and horizontal.
The material has been provided by InstaForex Company – www.instaforex.com
The wave markup for the GBP/USD pair looks complicated because it does not look like the trend’s classical correction or impulse section. Since the current upward wave has exceeded the peak of the last wave b, the entire downward trend section, consisting of waves a-b-c, can be considered complete. Although it hardly resembles the trend section for the same period in the euro’s performance, it should be recognized that both pairs have built downward three-wave sets of waves.
If this assumption is correct, a new upward trend has begun for the pound. Since I can single out only one wave from March 8, there is every reason to assume that forming a new trend section will take a long time. Both pairs should build similar wave formations. If this is indeed the case, wave 2 or b for the pound may be extended, and at the same time, a downward three-wave pattern can be built for the euro. Thus, I expect a deep wave b, as with the previous three-wave pattern. Therefore, the pair’s decline can be expected to reach the 1.1850 mark or slightly higher. However, at the moment, wave 1 or a continues to become more complex.
The British currency made the most of the news background.
The GBP/USD pair rate rose by 100 basis points on Thursday. And it covered this distance upwards throughout the day before the FOMC meeting results. As I have already said, at least two important reports were released in America during the day, each of which supported the US currency. But the market did not pay attention to them, anticipating Powell’s statement about stopping the interest rate hike. He did not wait for the statement but didn’t roll back down because of it. Thus, the British currency showed its cunning in all its glory: it grew on a temporary factor and ignored all the real ones.
Today, the ECB announced an increase in all rates by 25 basis points, causing the euro to fall. However, the British currency pretended that this decision had nothing to do with it, although it had repeatedly followed the euro like a dog before. But today, it dropped only a couple of basis points. As a result, the British currency updated its last peak again, and the presumed first wave took an even more extended form. In recent weeks, the British currency has been barely growing, but it is still growing. The news background allows the market to increase demand for the US currency, but this is not happening. Analysts try their best to explain what is happening in the market, but it needs to be more convincing.
General conclusions.
The wave pattern of the GBP/USD pair has long suggested the formation of a new downward wave. The wave markup, as well as the news background, is somewhat unambiguous. I do not see factors that would support the British currency in the long term, and wave b can turn out to be very deep, but it has yet to start. A decline in the pair is more likely now, but the first wave of the ascending section continues to become more complex, and the quotes have moved away from the 0.0% Fibonacci level. Now it will be more difficult to determine the beginning of the formation of wave b.
The picture is similar to the EUR/USD pair at the senior wave scale, but there are still some differences. At this time, the ascending correction section of the trend is complete. But the three-wave downward section may already be completed as well. And the new upward trend section can also be three-wave and horizontal.
The material has been provided by InstaForex Company – www.instaforex.com
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