Wave Structure Analysis
If this assumption is correct, we have already seen waves 1 and 2 within wave c.
If so, upward wave 3 in c, which began on August 8, is also forming into an extended five-wave structure.
Consequently, the pound has the potential to rise up to the 40th figure.
This would only be the third wave in the assumed wave c.
Following that, a fifth wave may develop, which could also take on a five-wave form...
Market Sentiment Shift
Reasons to sell the pound are increasing.
The GBP/USD pair rose by only 10 points on Wednesday.
Such a movement should be considered a typical pullback, with no real impact.
The amplitude of movements during the first half of today was very weak, but market activity may increase in the second half.
The U.S. ADP report on nonfarm employment was released a few hours ago, and its figures exceeded the market's typically pessimistic expectations.
News Impact and Wave Structure Incongruity
This is already a solid reason to continue increasing demand for the pound.
Additionally, this week it was revealed that the UK economy grew less than expected in the second quarter, and the Federal Reserve does not intend to cut interest rates by 50 basis points in two consecutive meetings.
Both pieces of news suggest better conditions for buying the U.S. dollar.
However, GBP/USD is still declining very slowly, and I anticipate a more significant decline.
For a long time, the wave pattern pointed to a decline, but the market reacted to the news in favor of the pound.
Conclusion and Outlook
Now that the news supports the dollar, the wave structure seems to contradict expectations of a drop in the pound.
Based on this, I expect the pair to fall below the 30th figure, but in that case, the wave structure will need further adjustments.
