You are here: Home > articles > Forex > GBP/USD. Analysis for October 24th. The euro pulled the pound down again
GBP/USD. Analysis for October 24th. The euro pulled the pound down again
October 24, 2023 5:25 pmVideo
Latest News
- Trading Signals for ETH/USD (Ethereum) for April 12-15, 2024: buy above $3,435 (3/8 Murray – 200 EMA) April 12, 2024
- EUR/USD. Analysis for April 12th. The euro falls down under the pressure of the news background April 12, 2024
- GBP/USD. Analysis for April 12th. A significant event: the pound fell below the 25-figure April 12, 2024
- Trading Signals for EUR/USD for April 12-15, 2024: buy above 1.0620 (-2/8 Murray – rebound) April 12, 2024
- GBP/USD: trading plan for the US session on April 12th (analysis of morning deals). The pound followed the euro April 12, 2024
- EUR/USD: trading plan for the US session on April 12th (analysis of morning deals). The euro continues to fall April 12, 2024
- EUR/USD and GBP/USD: Technical analysis on April 12 April 12, 2024
- EUR/USD: Dovish signals from the ECB and rising PPI April 12, 2024
- EUR/USD. April 12th. ECB meeting: confidence in rate cut increased in June April 12, 2024
- GBP/USD. April 12th. British economy continues to stagnate April 12, 2024
- Analysis and trading tips for EUR/USD on April 12 (US session) April 12, 2024
- Analysis and trading tips for USD/JPY on April 12 (US session) April 12, 2024
- Analysis and trading tips for GBP/USD on April 12 (US session) April 12, 2024
- Weekly Forex Outlook: 12/04/2024 – More inflation data on the way as rate cut bets in disarray April 12, 2024
- Technical Analysis – GBPUSD ticks down to new 5-month low April 12, 2024
- Bitcoin holds above $70,000 as halving event looms – Crypto News April 12, 2024
- Week Ahead – More inflation data on the way as rate cut bets thrown into disarray April 12, 2024
- Bitcoin will thrive during supply crisis April 12, 2024
- Technical Analysis – EURUSD plummets after US CPI and ECB decision April 12, 2024
- Will US retail sales add juice to the dollar’s rally? – Preview April 12, 2024
The wave analysis for the pound/dollar pair remains quite straightforward and clear. The construction of a new downtrend segment continues, and its first wave has taken on a fairly extended form. In my opinion, the British pound has no grounds for resuming an upward trend segment, so I do not even consider such a scenario. The assumed wave 1 or a is complete, although this conclusion is not as obvious for the British pound as it is for the euro. Wave 2 or b currently exhibits a three-wave pattern for the euro but not for the pound. Certainly, the corrective wave could be straightforward, but I still believe it should have at least three waves.
The internal wave structure of the first wave of the new trend segment looks complex, and it is difficult to identify five waves within it. However, five waves are visible for the euro. If the global wave has completed for the euro, there is an 80% probability it has done so for the pound as well. But regarding wave 2 or b, things are not as clear. I believe the correction could continue, despite today’s decline.
The pound/dollar pair’s exchange rate decreased by 40 basis points on Tuesday. This is not a significant drop and certainly does not indicate the completion of the corrective wave. However, the decrease from today’s peak amounts to 80 points, not just 40. Furthermore, the day is not over yet, and sellers have gained momentum.
If the market had specific reasons to decrease demand for the euro today, the reasons to decrease demand for the pound would be less convincing. The unemployment rate in the UK dropped to 4.2% in August, and the number of unemployment benefit claims increased by 20,000, surpassing market expectations. The second report was undoubtedly weak, but we should consider the overall unemployment rate as well. Business activity indices are also not entirely clear. The manufacturing sector increased from 44.3 points to 45.2, while the service sector decreased from 49.3 to 49.2. The decrease was small, but the increase was noticeable. These news updates could not or should not have diminished the market’s confidence in the British pound, which has been declining over the past three months.
Based on all that has been said, I believe it was the euro that pulled the British pound down, not the economic statistics from the UK. I have previously mentioned that these two currencies often move in the same direction and have a significant influence on each other. Today, we witnessed one such case. The same may happen on Thursday, when the results of the ECB meeting are revealed. Regardless of the outcome, we can expect a market reaction. Therefore, the British pound will not remain stagnant.
General Conclusions.
The wave pattern for the pound/dollar pair suggests a decline within the downward trend segment. The maximum the British pound can expect in the near future is the construction of wave 2 or b. However, as we can see, there are significant problems even with a corrective wave at this point. I would not recommend new sales at the moment, but I also do not advise purchases because the corrective wave currently appears quite weak. In any case, this is a corrective wave.
On a larger wave scale, the picture is similar to the euro/dollar pair, but there are some differences. The downward corrective segment of the trend continues its construction, and its first wave has already taken on an extended form, clearly unrelated to the previous upward trend segment.
The material has been provided by InstaForex Company – www.instaforex.com
Related Posts: