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The wave pattern for GBP/USD remains quite complex and ambiguous. The successful attempt to break through the 50.0% Fibonacci level in April indicated the market's readiness to build the downward wave 3 or c, but since then, we have only seen an increase. If this wave does resume its formation, the wave structure will become much simpler, and the threat of complicating the wave pattern will disappear. However, in recent weeks, the decline of the instrument has been quite weak, with sellers unable to break even the nearest 38.2% Fibonacci level successfully.
In the current situation, my readers can still expect the formation of wave 3 or c, with targets located below the low of wave 1 or a, at 1.2035. Therefore, the pound should decline by at least 700-800 basis points from the current levels. It may take a very long time to form the entire wave 3 or c. Wave 2 or b took 5 months to build, and it was only a corrective wave. The last corrective wave 2 or b in 3 or c turned out to be very extended, but the unsuccessful attempt to break through the 1.2822 level allows us to look downwards again.
The GBP/USD rate rose by 40 basis points on Wednesday, and this movement appears strong given the current situation. The market has still not successfully broken through the 1.2627 level, which I referred to as the key for the pound. Therefore, we are now seeing another retreat from the lows reached. The instrument has been trading between the 23.6% and 38.2% Fibonacci levels for one and a half months. Consequently, the conclusion of a sideways trend is becoming increasingly apparent.
Let me remind you that the current wave pattern suggests a significant decline in the instrument. Time passes, and we see only futile efforts by sellers who cannot push the pound down. As a result, the formation of each wave is delayed, and the entire wave structure lengthens and becomes increasingly complex and unreadable. Unfortunately, there is nothing I can do about such movements to "pack" them into a simple and clear pattern that could yield profits here and now. My readers can only come to terms with the way the market is trading at the moment.
Today, the ADP report led to a decrease in demand for the US dollar, and the minutes of the June FOMC meeting will be released in the evening. Recall that the FOMC meeting, at which the current monetary policy parameters were again maintained, and no hints were given about lowering rates in the near future, was not interpreted by the market as "hawkish." Demand for the US dollar remains very weak, so I do not believe any "hawkish" information will be contained in the evening's minutes. The instrument is likely to decline slightly by the end of the day for technical reasons. Tomorrow is Independence Day in the United States.
The wave pattern for the GBP/USD instrument still indicates a downward trend. Currently, I am considering selling the instrument with targets below 1.2039, as wave 3 or c has not yet been canceled. Since the instrument has formed a reversal around the 1.2822 mark, and also near the peak of the supposed wave 2 or b, sales of the instrument can be considered with initial targets around 1.2315. However, proceed with caution, as confidence in a shift to a "bearish" market sentiment will come after a successful attempt to break through the 1.2627 mark.
The wave pattern is even more illustrative on a larger wave scale. The descending corrective section of the trend continues to develop, and its second wave has extended to 76.4% of the first wave. An unsuccessful attempt to break this level could lead to the formation of wave 3 or c, but currently, a corrective wave is being formed.
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