The wave pattern for the Pound/Dollar instrument continues to look quite convincing. The increase in quotes in recent weeks suggests the construction of wave D. However, the current increase in quotes can also be interpreted as the first wave of a new upward trend segment.

A three-wave structure is already visible inside this wave. If it is still wave D, then this "fairy tale" may end for the British pound. If not, then the increase of the instrument will resume with targets located around 36th and 38th figures.

An unsuccessful attempt to break through the 50.0% Fibonacci level, however, indicates that the markets are not ready for further purchases. That is, it is likely that the construction of the proposed wave D is completed. If so, then now the construction of a new downward wave E can begin with targets located much lower than the low wave C. That is, much lower than the 31st figure.

Britain is not going to impose restrictions until the New Year

The exchange rate of the Pound/Dollar instrument moved rather weakly on Tuesday and then began to decline, which currently amounts to 40 basis points. This decrease is not yet able to have an impact on the wave pattern. It is also quite difficult for me to link the rise of the dollar to the news background. It is unlikely that the markets decided to react to the housing price index or the Richmond manufacturing index in the United States.

At the same time, the UK announced that quarantine would not be introduced until the New Year. Health Secretary Sajid Javid said that the government is closely monitoring the dynamics of Omicron and it has not changed over the Christmas period. Javid noted that people still need to remain vigilant and cautious, and also did not rule out that restrictions will be introduced in January. This issue will be resolved based on the statistics of Omicron cases.

If it worsens, the government may decide to impose quarantine restrictions. How tough they will be is not yet reported. Javid also called on Britain to celebrate the New Year in the fresh air, that is, on the street. And if they want to gather at home, then provide air circulation on the premises.

General conclusions

The wave pattern of the Pound/Dollar instrument looks quite convincing now. The supposed wave C completed its construction, but wave D could also complete its construction. Thus, now I would advise selling the instrument with targets located near the calculated marks of 1.3272 and 1.3043, which corresponds to 61.8% and 76.4% by Fibonacci levels, for each MACD signal "down" in the expectation of building a wave E. A successful attempt to break through the 50.0% level will indicate the readiness for further purchases of the British pound.

Starting from January 6, the construction of a downward trend section continues, which can turn out to be almost any size and any length. At this time, the proposed wave C may be nearing its completion (or completed). However, the entire downward section of the trend may lengthen and take the five-wave form A-B-C-D-E.