The wave for the pound/dollar pair remains relatively simple and clear. The construction of a new downtrend continues, and its first wave has taken a quite prolonged form. There is no basis for the British currency to resume the rising trend, so I do not consider such a scenario. The presumed wave 1 or a is completed. Regarding the euro, wave 2 or b already has a five-wave form, while it has taken a three-wave form for the pound. Thus, the wave analysis for both pairs currently allows for a resumption of the decline. For the British pound, wave 2 or b structure should have taken a minimum of three waves to expect its completion for both pairs. Both waves 2 or b have already taken an overly prolonged form, but if the construction of wave 3 or c begins now or has already started, then everything is in order.

The wave picture looks good and convincing at the moment. If not for a series of weak reports from the U.S., we would most likely have seen a continuation of the pair's decline and would have been even more convinced of the transition to wave 3 or c construction.

The exchange rate of the pound/dollar pair remained unchanged on Wednesday. The amplitude of movements today was very weak as the news background was feeble. Nevertheless, one report should be noted as it directly relates to the U.S. labor market. According to ADP data, the number of new nonfarm jobs in America increased by 103,000 in November. Market expectations were 130,000. Slightly below the forecast but still below.

It is worth noting that the ADP indicator, like the Nonfarm Payrolls indicator, has been permanently decreasing for a year and a half to two years. I don't see anything strange about this, as in the last year and a half, the Federal Reserve's interest rate has been rising, thus exerting a "cooling" effect on the economy. While the U.S. economy is not experiencing any problems, the labor market started reacting to the tough "hawkish" policy a few months ago. This is the effect that America wanted to achieve.

Now, it remains to wait for inflation to drop back to 2%. This may take quite a long time as the regulator no longer raises the interest rate. But at the same time, inflation is not rising, so the FOMC has no reason to raise it again. The market is now forced to pay attention to all reports, and U.S. reports have not been pleasing for a month and a half. The British pound holds its position against the dollar and may complicate wave 2 or b, but this wave is still interpreted as corrective.

General Conclusions:

The wave picture of the pound/dollar pair suggests a decline within the downtrend. At the moment, I recommend selling the pair with targets below the 1.2068 mark because wave 2 or b should eventually complete and may finish at any moment. The longer it takes, the stronger the subsequent decline of the British pound will be. The narrowing triangle is a harbinger of the completion of the movement.

The picture is similar to the euro/dollar pair on the larger wave scale, but there are still some differences. The descending corrective part of the trend continues its construction, and its second wave has already taken an extended form – at 61.8% from the first wave. An unsuccessful attempt to break through this mark may lead to the start of building wave 3 or c.