The upcoming week promises to be "hot." The last week saw a large number of important economic reports that not only influenced the movement of both instruments but also gave market participants much to ponder on. The upcoming week might bring everything into focus. Primarily, I am talking about central bank meetings, although even without them, there will be significant data. Let's deep dive into it.

FOMC meeting:

The Federal Reserve will undoubtedly not raise or, moreover, lower interest rates. Inflation has returned to a downward trajectory, so now is not the time for hasty conclusions and decisions. Nevertheless, the chances of a new rate hike could significantly increase from the current 0%. On Tuesday, a new report on inflation in the United States will be released. If it shows an acceleration in pace, everyone will understand that the overall slowdown has stopped. Meanwhile, the U.S. economy continues to show strong growth, the labor market is expanding, and unemployment fell to 3.7% in November. In my opinion, there are all the grounds for a possible rate hike. In this context, Fed Chair Jerome Powell's rhetoric will be crucial. If he indicates that the central bank is not willing to tolerate persistently high inflation, demand for the U.S. dollar may increase.

European Central Bank meeting:

There are currently few questions regarding the ECB. Inflation in the EU has already fallen to 2.4%, so there is no reason for the ECB to raise rates. Therefore, ECB President Christine Lagarde will not even talk about a possible rate hike. If she starts hinting at policy easing in 2024, it will be a bearish factor for the euro, thereby, reducing demand.

Bank of England meeting:

It is also challenging to expect significant decisions from the British central bank. BoE Governor Andrew Bailey said that a new rate hike is not necessary at the moment, and inflation in the UK has fallen below 5%, as he expected. However, it is still too early to talk about policy easing.

In my opinion, the most interesting and important events will be the U.S. inflation data and the FOMC meeting. I anticipate the U.S. dollar to grow stronger.

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 mark, and the fact that the pair has yet to surpass this level indicates that the market is ready to build a corrective wave. It seems that the market has completed the formation of wave 2 or b, so in the near future I expect an impulsive descending wave 3 or c with a significant decline in the instrument. I still recommend selling with targets below the low of wave 1 or a. At the moment, wave 2 or b can be considered completed.

The wave pattern for the GBP/USD pair suggests a decline within the downtrend. The most that we can count on is a correction. At this time, I can recommend selling the instrument with targets below the 1.2068 mark because wave 2 or b will eventually end, and it could do so at any moment. The longer it takes, the stronger the fall. The narrowing triangle is a harbinger to the end of the movement.