The wave analysis for GBP/USD remains quite complex but may be simplified in the coming weeks. A successful attempt to break the Fibonacci level of 50.0% indicates the market's readiness to build a downward wave 3 or C. If this wave indeed continues to develop, the wave pattern will become much simpler, and the threat of complicating the wave count will diminish.

As I've noted before, wave analysis should be straightforward and understandable to work with. Complexity and lack of clarity have been prevalent in recent months. The pair has been on a sideways trend for a long time and only now has a real chance of forming an impulse wave.

In the current situation, my readers can only hope for the formation of wave 3 or C, with targets located below the low of wave 1 or A. Therefore, the pound should decline by at least another 500–600 basis points. The news background favors the US dollar, and after breaking the level of 1.2469 (50.0% Fibonacci), the psychological barrier for sellers has been removed.

The dollar continues to benefit from the situation.

The GBP/USD exchange rate rose by 20 basis points on Tuesday. This is so minimal that it is not even worth mentioning. 20 points are not even a correction but simply an intraday pullback. Even today's news failed to increase market activity, although some reports could be considered important for the British economy. For example, the unemployment rate in the UK rose to 4.2%, although the market expected no more than 4%. Wage growth in February was 5.6%, which is in line with market and economic expectations. The number of unemployment claims increased by 11,000, with forecasts ranging from 15,000 to 17,000. None of these reports can be considered primary in terms of significance, so the market did not give preference to any of them.

In the second half of the day, two reports were released in the US, which put pressure on the dollar with their weak figures. However, the situation may change in favor of the American currency later today. Jerome Powell will speak in the evening, followed by Andrew Bailey. Undoubtedly, it is possible that neither of them will comment on the latest inflation or wage data and may not even touch on monetary policy. But if they do, Powell is expected to only mention the Fed's reluctance to adopt a softer policy in June. Such statements could boost demand for the dollar as the market becomes even more convinced that the FOMC will not lower rates in June. Although I already see this as clear.

The current news background is favorable for the US currency, and the wave count continues to indicate only its growth. A successful attempt to break the Fibonacci level of 50.0% indicates the market's readiness to reduce demand for the pair.

General conclusions.

The wave pattern of the GBP/USD pair still suggests a decline. At the moment, I am still considering selling the pair with targets below the level of 1.2039 as wave 3 or C begins to form. A successful attempt to break the level of 1.2472, which corresponds to 50.0% Fibonacci, indicates the long-awaited readiness of the market to form a downward wave.

On a larger wave scale, the wave pattern is even more eloquent. The downward correctional trend continues to form, with its second wave taking on an extended shape - up to 76.4% of the first wave. A failed attempt to break this level could have led to the beginning of the formation of wave 3 or C.

Key principles of my analysis:

1. Wave structures should be simple and understandable. Complex structures are difficult to play, often leading to changes.
2. If there is no confidence in the market situation, it's better not to enter it.
3. There is never 100% certainty in the direction of movement. Remember protective stop-loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.