30.10.202304:01 Forex Analysis & Reviews: The Bank of England meeting is a chance for the pound

We can look forward to the upcoming events. A whole package of different reports will be published in the U.S., which traders may find interesting. Among them are the Nonfarm Payrolls, unemployment, ISM indices, the ADP report, and others. In addition, the Federal Reserve will hold its policy meeting. The Bank of England will also hold a meeting. I believe that the market will keep an eye on the U.S. reports. I assume that the market does not expect any changes in monetary policy in either the U.S. or the U.K. Therefore, the market's reaction may be similar to the European Central Bank's meeting last week when all we saw was a 20-30 pip move.

It is very difficult to expect weak values from the U.S. data. Time is passing, analysts and economists are predicting a recession in America, yet almost all economic indicators remain at a high level or are growing. Even business activity indices, which declined as the Fed raised interest rates, have recently begun to rise, and the economy grew by 4.9% in the third quarter. Consequently, there is no reason to even talk about a recession right now. It may start next year, but that will be next year.

In conclusion, the U.S. data may provide support for the greenback. The best case for the British currency is that the U.S. reports will be neutral for the dollar and will not be played out by the market. This leaves only the BoE meeting, at which the rate is unlikely to change. Therefore, the Committee's vote will be crucial for the market. In the previous meeting, the hawks only won by a margin of one vote. At this meeting, the number of those who support a rate hike may decrease to 3 out of 9. If this number is lower, the market will believe that the Bank is dovish. If there are more of them, then it's a hawkish stance. This is a chance for the pound. The British currency needs the results of the BoE meeting to be interpreted as hawkish.

Based on the analysis, I conclude that a bearish wave pattern is still being formed. The pair has reached the targets around the 1.0463 level, and the fact that the pair has yet to breach this level indicates that the market is ready to build a corrective wave. A successful attempt to break through the 1.0637 level, which corresponds to the 100.0% Fibonacci level, would indicate the market's readiness to complete the formation of Wave 2 or Wave b. That's why I recommended selling. But we have to be cautious with short positions, as Wave 2 or Wave b may take on a more complex form.

The wave pattern for the GBP/USD pair suggests a decline within the downtrend segment. The most that we can expect from the pound in the near future is the formation of Wave 2 or b. However, there are currently significant issues even with the corrective wave. At this time, I would not recommend new shorts, but I also wouldn't recommend longs because the corrective wave appears to be relatively weak. In any case, it's a corrective wave. You can consider shorts if the pair successfully breaches the 1.2120 mark, but you should still be cautious.