The wave counting on the GBP/USD currency pair currently looks quite convincing, but may soon require adjustments and additions. The third unsuccessful attempt to break through the 1.3873 mark, which is equal to 23.6% Fibonacci level, again led to the exit of quotes from the reached highs, and wave c still does not look fully completed. Thus, I expect the resumption of the construction of this wave and the increase in the quotes of the instrument. However, given the strong decline in the quotes in recent days, the chances of resuming the construction of the expected wave c are decreasing. An unsuccessful attempt to break through the 38.2% Fibonacci level may lead to the completion of the construction of a downward correction wave in the composition of c. In this case, the entire wave c will take a much longer form and a much more complex structure. But a successful attempt to break through the 38.2% Fibonacci level is almost guaranteed to lead to the need to revise the entire wave count.
The exchange rate of the GBP/USD pair increased by 30-40 basis points on Tuesday. There were no important economic reports on Monday and Tuesday, so the news background did not have any impact on the mood of the markets. Nevertheless, the markets were quite actively trading the British pound. But what's even more important is the announcement of the results of the Fed tomorrow, and the Bank of England meeting the day after tomorrow. According to most analysts, nothing extraordinary should be expected from the British Central Bank. Most likely, it will leave its monetary policy unchanged, even though at the last three meetings, one member of the monetary committee has consistently voted in favor of reducing the volume of the stimulus program.
Analysts expect that this time Michael Saunders will remain alone. Although it is impossible to say this with 100% certainty. Recent reports in the UK have made it clear that unemployment is declining at a faster pace than expected in the Bank of England, and inflation has started to rise and has already exceeded the threshold of 3.0% YoY. Although earlier, Andrew Bailey spoke about a possible increase in inflation to 3%, now this indicator may exceed this value. But still, I also do not believe that the Bank of England will change the parameters of monetary policy or make loud statements about curtailing the economic stimulus program, the size of which remains at around £895 billion. Most likely, the Bank of England will wait for the Fed to start tightening monetary policy first, and only after that, will it take up the matter itself.
The wave pattern is now more or less clear. I still expect the construction of an upward wave, so at this time I suggest considering buying the instrument for each MACD signal "up" with targets located near the 1.4000 mark (the first target). The instrument, however, is now continuing to build an internal corrective wave consisting of c. An unsuccessful attempt to break through the 1.3643 mark, which corresponds to 38.2% Fibonacci level, indicates that the markets are ready to buy the British pound. However, if you open purchases, then before the two meetings of the central banks, it is necessary to set Stop Losses.
The upward section of the trend, which began its construction a couple of months ago, has taken a rather ambiguous form and has already been completed. A new section of the trend can get an impulse form, its first wave has acquired a sufficiently extended form and exceeded the peaks of waves b and d. The chances of a new strong increase in quotes remain quite high.
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