The wave structure of the upward section of the trend, which originates on March 20, took a completely complete form. A successful attempt to break the previous maximum led to a complication of the internal wave structure of the wave Z, but at the moment this wave looks fully equipped. Thus, the decline in quotes can continue with the goals located around 27 and 28 figures as part of the construction of a new downward section of the trend.
If we look at the current wave pattern in more detail, we can see that the upward section of the trend and, in particular, the wave Z can be completed due to the departure of quotes from the reached highs on Friday. However, in the past few months, demand for the US currency has been extremely low, and if it continues to be so, the wave 5, C, Z may take an even more complex and extended form. Thus, before a successful attempt to break through the minimum of wave 4, the construction of an upward trend section can resume at any time.
The pound has been trading in some kind of apocalypse for the past few days. The currency is tossing from side to side, and Friday’s statistics from the UK did not have any positive effect on the position of the British. At the end of last week, it also became known that the next stage of negotiations between the groups of Michel Barnier and David Frost ended without any progress.
This was stated by both sides, and Barnier even said that the negotiations have already begun to move in the opposite direction, and the parties – not to approach a common opinion, but to move away from each other. Thus, the negotiations between London and Brussels are already taking place according to the following scheme. When there are no negotiations, both sides declare that an agreement is possible (despite the fact that there are only 4 months left before the end of the year, and the agreement needs to be fully agreed at least two months before the end of the year), as soon as the next stage of negotiations ends, the parties declare that there is no progress.
Who is expected to comment that a deal is possible if there has been no progress on key issues for several months? The pound has long ignored the complete lack of understanding between the participants in the negotiation process, but in recent days it seems that it is preparing for a new prolonged fall. This can only be prevented by America, which in 2020 had so many events that would have been enough for several countries for several years.
However, if the economic and epidemiological problems remain, and the White House and Congress continue to organize political wars instead of solving urgent issues and problems, the markets may again significantly lower the demand for the dollar. No statistics are expected from the EU and the US on Monday.
General conclusions and recommendations:
The pound/dollar instrument resumed building the upward wave Z and could immediately complete it. Thus, I would recommend now to buy the instrument with the goals located near the estimated mark of 1.3368, which is equal to 200% for Fibonacci, for each signal of the MACD up, but at the same time I still believe that the entire upward section of the trend is nearing its end or has already been completed. If this is true, then buying now is too risky. I recommend that you consider selling the instrument if you successfully attempt to break through the low wave 4.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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