The wave marking for the pound/dollar instrument required clarifications, which were made. The upward wave constructed between May 13 and May 27 does not currently fit into the overall wave picture, but it can still be regarded as a segment of the downward trend. Thus, we can now definitively state that the building of the upward correction phase of the trend has been canceled, and the downward component of the trend will have a longer and more complex shape. I am not a huge fan of continually complicating the wave marking when dealing with a trend zone that is significantly elongating. I believe it would be far more efficient to recognize rare corrective waves, following which new impulse structures could be constructed. Now that waves 1 and 2 have been completed, we may infer that the instrument is in the process of constructing wave 3. However, this wave proved unconvincing (if finished now), as its low is not significantly lower than wave 1's low. Consequently, the current downturn cannot be characterized as impulsive, but it may be a complex correction. Focus on the wave marking of the EUR/USD instrument in this regard.

The pound no longer knows what it desires.

In July, the pound and dollar exchange rate jumped by 150 basis points. This is excellent news for the British, whose demand has been progressively falling over the past few months. I leave unanswered the question of why there was such an increase in the value of the British pound on Monday when no significant event occurred. The wave marking did not indicate a significant increase, as the third wave is not yet complete. However, the pound decided to confound everyone and everything. Initially, the instrument did not want to construct a logical trend correction section; now, it does not want to construct a logical trend impulse declining part. Thus, you must anticipate that the wave marking will get increasingly complex on multiple occasions. The market is currently anticipating two significant central bank meetings. Future meetings are crucial since both may include surprises. Over the past two weeks, the likelihood of a 100-basis-point rate hike by the Federal Reserve has slowly climbed as the inflation report has once again disappointed American analysts and lawmakers. Currently, this chance is less than 25 percent, but some FOMC members still support a 100-point tightening. Therefore, this possibility cannot be ruled out entirely.

Additionally, the Bank of England may provide a surprise. It raised interest rates five times in a row, although this had no effect on inflation in the United Kingdom. On Wednesday, a new report will be revealed; if the consumer price index rises more than anticipated, the Bank of England may decide to take drastic action and raise the interest rate by 50 basis points. This situation may lead to a rise in demand for the pound sterling, given all previous gains were deemed insufficient by the market.

General conclusions

The increased complexity of the wave structure of the pound/dollar pair signals a further downturn. For each "down" MACD signal, I recommend selling the instrument with objectives at the estimated mark of 1.1708, corresponding to 161.8 percent Fibonacci. Now, there is a prospect of an upward wave forming, but I do not anticipate it to be robust and protracted.

At the higher wave scale, the image closely resembles the euro/dollar instrument. The same ascending wave does not fit the present wave pattern, followed by the same three descending waves. Thus, one thing is unmistakable: the downward segment of the trend continues to develop and can reach practically any length.