For the GBP/USD pair, the wave analysis remains quite complicated. A successful attempt to break through the 50.0% Fibonacci level in April indicated that the market was ready to build a downward wave of 3 or C. If this wave really continues its construction, then the wave pattern will become much simpler, and the threat of complications in the wave analysis will disappear. However, in recent weeks, the pair has remained the same, which again makes us doubt the readiness of the market for sales.

In the current situation, my readers can still count on building wave 3 or c, the targets of which are located below the low of wave 1 or a, the mark of 1.2035. Consequently, the British dollar should decrease by at least 600-700 more base points from current levels. With such a decrease, wave 3 or c will turn out to be relatively small, so I expect a much larger drop in quotes. It may take a lot of time to build the entire wave 3 or c. Wave 2 or b has been under construction for five months, and this is only a corrective wave. Building a pulse wave can take even longer. The last corrective wave turned out to be very long, and it still could not complete its construction, jeopardizing the entire wave layout.

It's a small matter – the Bank of England must take active action.

The GBP/USD exchange rate decreased by 15 basis points on Monday. Market activity was very low. The market still wants to keep the demand for the pair high, and there must be specific reasons for this. At least, that's what I want to believe. Last week showed us that the market is ready to act only upon the facts. The ECB lowered the rate, and American statistics showed good results – well, you can sell the euro and buy the dollar. In the case of the British, the Bank of England has not yet made any important decisions, although rumors of a rate cut in the summer are flying in the atmosphere. If this assumption is correct, then we need to wait for the next meeting of the Bank of England and hope that it will be the most "dovish" possible.

In the meantime, the British risk continues to hang out between the Fibo levels of 38.2% and 23.6%. This is not a strong area or a horizontal channel. This is just a range in which the British feel quite comfortable, and the market is in no hurry to reduce demand for it. In that case, why would the pound come out of it? The wave analysis leaves him with no other options other than a decline, but the market must make the appropriate decision. If there is no decision to sell, then there will be no decrease. Therefore, this week's US inflation report and the Fed meeting are the events that can push the pair to fall. But they may well be on the wrong side of the dollar. One should be very careful with these events.

General conclusions.

The wave pattern of the GBP/USD pair still suggests a decline. At the moment, I am still considering selling the pair with targets located below 1.2039, as wave 3 or c has not yet been canceled. Since the pair is trying to form a reversal near the 1.2822 mark, as well as near the peak of the expected wave 2 or b, then the sale of the pair can be considered with the first targets located near the 1.2315 mark. But very carefully since the market is extremely reluctant and rarely increases demand for the US currency.

At the higher wave scale, the wave pattern is even more eloquent. The downward correction section of the trend continues to build, and its second wave has acquired an extended appearance – by 76.4% of the first wave. An unsuccessful attempt to break through this mark could lead to the beginning of building 3 or c, but a corrective wave is currently being built.

The basic principles of my analysis:

1) Wave structures should be simple and understandable. Complex structures are difficult to play out; they often bring changes.

2) If you are not sure what is happening in the market, it is better to avoid entering it.

3) The direction of movement is not absolute, and it can never be. Do not forget about Stop-Loss protection orders.

4) Wave analysis can be combined with other types of analysis and trading strategies.