After breaking the local high of 1.3535 at the start of the week, the GBP/USD pair has entered a correction: pressure on the pound is increasing following the publication of macroeconomic data from the UK, indicating a slowdown in business activity.

During the Asian session, the GBP/USD pair is correcting in the area of 1.3561, supported by neutral dynamics of the American currency quotes, while the potential for the pound's upward trend to continue remains high, supported by stable macroeconomic statistics and signs of recovery in the UK financial sector.

The possibility of growth remains.

On the daily chart, an upward third wave of a higher level (3) is developing, in which the first wave of a lower level 1 of (3) and a correction as the second wave 2 of (3) have completed, and the third wave 3 of (3) is also being built. On the four-hour time frame, the entry first wave of a lower level i of 3 and wave (iii) of i are observed, and, presumably, the correction as wave (iv) of i has ended. If the assumption is correct, the upward movement of the GBP/USD pair will continue to the area of 1.3685–1.4000, and the critical stop-loss level for this scenario will be 1.3390.

The pound is correcting during the morning session on December 31, extending a bearish impulse near 1.3461, which has pushed the GBP/USD pair away from its September highs. Market activity remains subdued as many trading venues are closed due to the New Year and Christmas holidays; however, pressure on the US dollar continues amid expectations of further monetary easing by US authorities. It is worth recalling that a new Chair of the Federal Reserve will be appointed in May, potentially supporting the Republican administration’s rhetoric in favor of changes in monetary conditions. The leading candidate for the post is White House economic adviser Kevin Hassett, a strong supporter of President Donald Trump’s policies.