For the pound/dollar instrument, the wave markup continues to look very convincing and does not require adjustments. The downward section of the trend continues its construction within the framework of the wave e-E, and its internal wave marking looks quite complicated. Nevertheless, I have identified five waves inside this wave and, if my markup is correct, then wave 5, the last internal wave, is being built at this time. Thus, we get almost identical wave markings for the British and the European, each of which indicates the possible imminent completion of the downward trend section. Or everyone will have to take a much more complex and extended view, which can be facilitated by a weak news background or a complex geopolitical one. The wave 5-e-E may already be completed, but a successful attempt to break through the 1.2245 mark, which corresponds to 127.2% Fibonacci, indirectly indicates the opposite. However, now this wave can end at any moment, regardless of breakthroughs. If the current wave marking does not become more complicated, then the decline in the British dollar may be completed in the near future. At the moment, however, the market is not making any attempts to do this.The Briton will try to do without new complications of the wave pattern.
The exchange rate of the pound/dollar instrument increased by 60 basis points on May 13. The news background on this day was insignificant. All the main economic news came out on Thursday: GDP and industrial production in the UK. And a day earlier - inflation in the United States. Thanks to these reports, the British dollar fell in price by about 150 more basis points. However, the most resonant topic of this week was rumored that the Bank of England may take a break in raising rates. I can't say how much these rumors have affected the mood of the market, but I don't see anything terrible in them. The Bank of England has raised the rate four times in a row, so a pause for 1-2 months looks normal. Now we need to evaluate the results of these increases to then decide on the need for a new tightening of monetary policy. However, the market is not too diligent now to understand all the background of the PEPP or economic data. There is a reason to sell - sell. Such a motto now clearly appeals to most of the market.
In contrast to this mood, a wave pattern works, which assumes the completion of the construction of a downward trend section. It is important that the wave patterns of the European and the British now almost completely coincide. You can count on the completion of downward trends for both instruments. Agree, it would be strange if a European started an upward trend, but a Briton did not. Next week, the UK will release a report on unemployment, average wages, inflation, and retail trade. I think the most important thing right now is inflation. Not so long ago, the Bank of England gave a forecast for inflation for 2022 - 10.25%. Forecasts say that by the end of April, inflation will rise to 9%. Thus, the figure of 10.25% does not even look excessively high. The higher the growth, the more likely the Bank of England will refuse to pause in raising the interest rate. And this factor can support the demand for the British currency.
General conclusions.
The wave pattern of the pound/dollar instrument still assumes the completion of the construction of wave E. Now I also advise selling the instrument with targets located near the 1.1704 mark, which corresponds to 161.8% Fibonacci, since the attempt to break through the 1.2246 mark turned out to be successful. However, the construction of a downward section of the trend is nearing its completion and the mark of 1.2246 looks very good for the trend to end near it. A break of this mark from the bottom up will be a signal to close sales and, possibly, to open small purchases.
At the higher scale, the entire downward trend section looks fully equipped. Therefore, the continuation of the decline of the instrument below the 22nd figure is far from obvious. Wave E has taken a five-wave form and looks quite complete.
