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 completed. As a result, the instrument's price increase may last for a while. Therefore, both instruments are still in the process of developing an upward trend segment, which will be followed by the start of 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 was complicated by the rise in quotes the week before last, and it was further complicated the following week. At the start of this week, the rise in quotes was continuing. 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.

On Monday, the pound/dollar exchange rate fluctuated in different directions but was still close to its peak. Even if the instrument declines at the end of the day, more than this will be needed to determine whether wave e and the entire upward trend section have ended. Since wave e has already assumed an excessively extended form, it could end at any time. Of course, it could go on even longer, but in this situation, it would be pointless to analyze the waves because there would be no benefit. For the time being, I hope that the market will continue to consider potential purchases of American currency as well and that it will not, for the umpteenth time, increase demand for British currency when there is no justification to do so.

I stated last week that the rise in the British dollar's quotes appears to be both amazing and strange. The market is trying to rise as high as possible before collapsing. There aren't any other explanations I can think of for what's happening. Even today, when the final values of two business activity indices published in the UK a few weeks ago were released and carried no value, the market increased British purchases several times throughout the day. So it makes sense to wait for the formation of a downward trend segment, but given the attitude and strategy adopted by most market participants, you can wait for it for a very long time. There is little hope for American statistics, which have yet to be released. The ISM business activity index for the services sector must decline, which is likely to cause a new decline in the dollar value.

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 permits the construction of a downward trend section, I cannot advise 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 form.

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.