The current wave pattern of the GBP/USD pair still looks quite convincing. The supposed wave b turned out to be too deep, but it still does not break the wave pattern. The quote exiting from the lows reached last week indicates that wave b may already be completed. Thus, the markets still have the opportunity to build a three-wave upward structure. This option remains the main one at this time. A successful attempt to break through the lows of the last waves b and e will indicate that the markets are not ready to buy the pound and will need to make adjustments to the current wave pattern. But as in the case of the euro, it is recommended to start from the wave pattern option that is currently available, and not fantasizing about "what could happen if...". Once there are concrete signals that the current wave marking is unattainable, then it is necessary to look for new options.
The specified instrument rose by about 60 basis points last Friday. The demand for the British currency began to increase during the night. Thus, the markets, probably even before the start of Powell's speech, assumed that he would not report anything interesting. And so it happened, so the market's reaction can be considered quite natural. In addition to Mr. Powell's speech, a quite important report on Americans' personal income was released in the US in July, which showed an increase of 1.1% m/m, although the markets expected to see no more than + 0.2% m/m. The consumer confidence index from the University of Michigan was also released in the final assessment. It amounted to 70.3 points compared to the previous month's value of 81.2. However, the market was already ready for such a decline, since the first assessment of the index already showed it. Thus, the main event of the day was still Jerome Powell's speech. Moreover, there was not a single interesting economic report in the UK. On Monday, a report on the number of pending home sales transactions was released in the United States, which fell by 1.8% mom and by 8.5% yoy in July. This is a weak value, but the markets showed that they were not at all interested in this data. In this case, three of the four important events of Friday and Monday did not arouse any interest. The proposed wave c can continue its formation since economic data does not interfere with this in any way yet. There will be no more important reports on Tuesday. We can only pay attention to the consumer confidence indicator, which may decline following the Michigan consumer confidence index at the end of August, as well as another report on inflation in the European Union. However, it will be more important for the EUR/USD pair.
The wave pattern is now more or less clear. An upward wave is still expected to form, so it is currently suggested to consider buying the instrument for each MACD upward signal, with targets located around the level of 1.4000 (the first target). The instrument has supposedly completed forming the downward wave b and is ready to rise.
The upward section of the trend, which started to form a few months ago, has taken on a quite unclear form and has already been completed. A new part of the trend may acquire an impulsive form, whose first wave acquired an extended form and exceeded the highs of waves b and d. The chances of another strong increase in quotes are rising. If the news background does not interfere, then the quotes should continue to increase in the near future.
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