GBP/USD. Analysis for July 26th. The British pound has already initiated the formation of a corrective wave
July 26, 2023 5:22 pm
The wave analysis for GBP/USD remains straightforward and understandable. The construction of an upward wave 3 is complete, and there are indications of the potential development of a new downward trend segment, possibly wave 4. There is no fundamental basis for the pound to sustain its upward movement (supported by numerous reports and events that confirm my view). Nevertheless, the wave analysis has evolved into a more intricate structure, with wave 3 displaying greater extension than many analysts had anticipated a few weeks ago. The upward trend may adopt a five-wave pattern if the market finds new reasons to buy.
The current wave pattern for the British pound is much simpler and more convincing than the euro. In any case, I expect the formation of a downward wave, which has commenced according to the projected schedule. Whether it constitutes the fourth wave within the upward wave sequence, it is likely to be extensive or distinctly three-wave. The decline in quotes is not anticipated to conclude shortly, although an upward retracement is plausible.
Today, there is no significant news background, and yesterday’s news was weak. I do not attribute the current increase in demand for the pound to the news. Instead, the wave pattern necessitated the formation of a corrective wave, leading to a rise in the pair’s value. Notably, the upward reversal occurred around the 161.8% Fibonacci level, which was predictable.
The market might witness a surge of activity tonight, as predicting the content of Federal Reserve Chairman Jerome Powell’s speech is exceedingly challenging. The key question revolves around whether there will be a final rate hike today or if there will be another one. Powell will address this matter during the press conference. Additionally, the FOMC’s “dot plot,” which provides rate forecasts for different periods by all FOMC policymakers, will be published today, offering insights into the expected peak rate levels.
The corrective wave may conclude as early as today if the pair experiences a sharp surge and the Federal Reserve intends to implement another rate hike later this year. Nevertheless, it would be prudent to wait until tomorrow to understand better how the market processes the information received. The Bank of England’s meeting is scheduled for the following week.
General Conclusions
The wave pattern for the GBP/USD pair suggests a decline in the upcoming weeks. As the successful breakthrough above 1.3084 (from top to bottom) occurred, my readers could engage in sales, as I had mentioned in my recent reviews. Although the 1.2840 level has yet to be surpassed, the current upward wave might be short-lived, and I expect a resumption of the downward movement after it. The current wave has descended below the peak of wave 3 in 5, indicating the formation of a downward segment of the trend. Therefore, selling can be considered based on MACD signals indicating a “down” trend.
The pattern resembles the EUR/USD pair on a larger wave scale, but there are still some distinctions. The downward corrective segment of the trend is complete, and a new upward one is under construction, which may either be complete already or assume a complete five-wave pattern.
The material has been provided by InstaForex Company – www.instaforex.com
The wave analysis for GBP/USD remains straightforward and understandable. The construction of an upward wave 3 is complete, and there are indications of the potential development of a new downward trend segment, possibly wave 4. There is no fundamental basis for the pound to sustain its upward movement (supported by numerous reports and events that confirm my view). Nevertheless, the wave analysis has evolved into a more intricate structure, with wave 3 displaying greater extension than many analysts had anticipated a few weeks ago. The upward trend may adopt a five-wave pattern if the market finds new reasons to buy.
The current wave pattern for the British pound is much simpler and more convincing than the euro. In any case, I expect the formation of a downward wave, which has commenced according to the projected schedule. Whether it constitutes the fourth wave within the upward wave sequence, it is likely to be extensive or distinctly three-wave. The decline in quotes is not anticipated to conclude shortly, although an upward retracement is plausible.
Today, there is no significant news background, and yesterday’s news was weak. I do not attribute the current increase in demand for the pound to the news. Instead, the wave pattern necessitated the formation of a corrective wave, leading to a rise in the pair’s value. Notably, the upward reversal occurred around the 161.8% Fibonacci level, which was predictable.
The market might witness a surge of activity tonight, as predicting the content of Federal Reserve Chairman Jerome Powell’s speech is exceedingly challenging. The key question revolves around whether there will be a final rate hike today or if there will be another one. Powell will address this matter during the press conference. Additionally, the FOMC’s “dot plot,” which provides rate forecasts for different periods by all FOMC policymakers, will be published today, offering insights into the expected peak rate levels.
The corrective wave may conclude as early as today if the pair experiences a sharp surge and the Federal Reserve intends to implement another rate hike later this year. Nevertheless, it would be prudent to wait until tomorrow to understand better how the market processes the information received. The Bank of England’s meeting is scheduled for the following week.
General Conclusions
The wave pattern for the GBP/USD pair suggests a decline in the upcoming weeks. As the successful breakthrough above 1.3084 (from top to bottom) occurred, my readers could engage in sales, as I had mentioned in my recent reviews. Although the 1.2840 level has yet to be surpassed, the current upward wave might be short-lived, and I expect a resumption of the downward movement after it. The current wave has descended below the peak of wave 3 in 5, indicating the formation of a downward segment of the trend. Therefore, selling can be considered based on MACD signals indicating a “down” trend.
The pattern resembles the EUR/USD pair on a larger wave scale, but there are still some distinctions. The downward corrective segment of the trend is complete, and a new upward one is under construction, which may either be complete already or assume a complete five-wave pattern.
The material has been provided by InstaForex Company – www.instaforex.com
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