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The section of the trend, which originates on September 23, took a five-wave fully equipped form. However, the internal wave structure of the proposed wave 5-5 still does not look entirely convincing and may require additions and adjustments. Nevertheless, the upward trend has been nearing its end for a long time. The demand for the British dollar, however, remains quite high, and this factor can lead to a further complication of the upward trend.
On the lower chart, the wave marking has suffered certain changes and may require making adjustments again. At the moment, it is quite possible to continue increasing the quotes of the instrument within the wave 3-5-5. At the same time, the wave marking of the wave 5-5 does not look quite convincing. A successful attempt to break through the 127.2% Fibonacci level indicates that the markets are ready for new purchases of the British dollar, and the entire upward trend is likely to be complicated again. The departure of quotes from the achieved highs is still too much to draw serious conclusions.
The British currency continues to be very close to the highs of the entire upward trend area. The withdrawal of quotes, which began in recent days, is not even a correction wave yet. Thus, it looks more like a simple market noise and does not allow us to conclude that the upward trend is over. This means that at any moment this very section of the trend can resume its construction, especially since its internal wave structure does not yet look complete. As for the news background, nothing remarkable has happened in the UK in recent days. Yesterday, Bank of England Governor Andrew Bailey spoke at an online forum hosted by the International Forum in Davos. However, the topic of his speech concerned cryptocurrencies, so the currency markets were not interested in his speech.
More interesting were the economic reports that came out this morning in the UK. The unemployment rate rose to 5.0%, although markets had expected a rise to 5.1%. The number of new applications for unemployment benefits increased by 7 thousand, although expectations were almost 50 thousand, and wages in November, including and excluding bonuses, increased by 3.6%, although forecasts were again lower. Thus, the statistics from Britain today turned out to be quite strong. However, the pound sterling did not pay attention to it and continues to slowly slide down, while maintaining the opportunity to start a new upward wave at any time. Today in the afternoon, the US will still release a report on consumer confidence, which reflects how confident households are now in the economy and its prospects. However, it is unlikely to interest the markets. So far, the Briton can still try to build another downward wave.
General conclusions and recommendations:
The pound/dollar instrument continues to build an upward trend section. Thus, I currently recommend buying the pound/dollar instrument in the event of a successful attempt to break through the 127.2% Fibonacci level with targets located near the 40th figure, within the estimated wave 3-5-5 of the upward trend. So far, there are no clear signals about the end of the upward trend.
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