31.05.202118:07 Forex Analysis & Reviews: Analysis of GBP/USD on May 31. Pound gains strength to break through the level of 1.4240

The wave pattern of the GBP/USD pair has not changed in recent weeks. The pound has been in the side range of 120 basis points for two weeks now. Thus, after the assumed wave e ended its formation, the correction wave structures began, which are very difficult to describe and define for any structure of the higher scale. At this time, the wave pattern leaves too many unanswered questions, so it is still recommended to wait for it to clear up. After all, one can't really trade inside the side range especially using waves. It has been repeatedly mentioned that the level of 1.4240 can help determine the markets with the further direction. The quotes have approached it several times in two weeks, but it never hit it. Thus, there was no attempt to break through this level. The current wave pattern is simple. It is absent, which gives more reason to wait for it to clear up a little. Without this, it is extremely difficult to make any forecasts.

On Monday morning, the indicated instrument was also moving without much enthusiasm due to a completely empty news background. Thus, there is generally nothing to analyze. On Tuesday, the Governor of the Bank of England, Andrew Bailey, will make a speech and it can be very interesting. The fact is that the last statement of the representative of the Bank of England, Gertjan Vliege, was quite "loud" and unexpected. During the previous week, he said that a key rate surge could take place as early as next year, but if the British economy develops at a high rate, then maybe even a little earlier. There is no doubt that the markets seriously took this information, but the pound's demand did not increase. Now, Andrew Bailey can either confirm this information or deny it. It should be noted that one vote from Vliege is clearly not enough to raise the rate. The monetary committee has 9 members, so at least 5 must vote to raise it.

It can also be recalled that the Bank of England was thinking about lowering the key rate during the second half of 2020. In this case, it would become negative, as in the European Union, but it didn't come to that. If Andrew Bailey's rhetoric on Tuesday is about interest rates and monetary policy, it may give the GBP/USD pair a new boost. Everything depends on the level of 1.4240.

At this time, the wave pattern continues to be twofold, so it is suggested to wait for it to be clear. Everyone sees that the pound is moving horizontally, making it hard to be traded. At the same time, it is not even clear whether the proposed wave e is already done with its formation. Its internal wave structure looks ambiguous. It is possible to sell the instrument with a protective order above the level of 1.4240, which corresponds to 0.0% of the Fibonacci. But once the level of 1.4240 is broken, buying will be considered.

The upward part of the trend, which started to form a few months ago, is taking on a quite vague form. It was mentioned above that several wave pattern options are possible at once. Unfortunately, different options offer different further developments. Therefore, it may be necessary to wait for some time for the current wave pattern to slightly clear up.