The wave structure of the upward trend took a complete form. The assumed wave Z looks quite complete and has taken a 3-wave form. In turn, the wave C-Z took a full 5-wave form. So at the moment, everything looks quite convincing.
Based on the current wave markup, I expect to build a downward section of the trend, which can be built for several months. It is difficult to say what it will be. One thing is for sure – until a successful attempt to break the maximum of the wave Z, there is no question of complicating the upward section of the trend.
When we look at the current wave pattern in more detail, we see that the upward section of the trend ( wave Z) really looks quite complete. However, the expected new downward trend is still unclear. It is possible to build the first wave of a new section of the trend, however, it should take a pulse form, that is, a 5-wave one. What we see now doesn’t look like an impulse wave. Thus, I would say that now everything looks as if the upward trend will be complicated.
There is very little news from the UK this week. There were no economic reports at all, and there won’t be any at the end of the week. There is also little news from Boris Johnson. The Prime Minister of Great Britain only recently declared that he feels good. He hired a personal trainer and has already lost 9 kilograms, so he feels “better than before the coronavirus disease”.
Meanwhile, the EU is preparing for Brexit without an agreement. German Chancellor Angela Merkel said that the European Union will not hold new talks with British diplomats next week on the Brexit agreement. The German Chancellor does not see any need for this, since the last rounds of negotiations have not brought any progress.
Germany, which holds the unofficial title of leader in the European Union, was supposed to take an important role in the discussion of controversial issues between London and Brussels. However, Angela Merkel refuses to discuss anything now. Earlier, Merkel discussed Brexit issues with French President Emmanuel Macron, and even this meeting did not make any positive changes to the overall situation.
Thus, according to many experts, Brussels will now definitely be preparing for Brexit without an agreement and not spend more time trying to negotiate with London. Michel Barnier has repeatedly stated that the negotiations are at an “impasse”, and said that the parties began to move away from each other, as London suddenly began to express new demands.
General conclusions and recommendations:
The pound/dollar instrument resumed building the upward wave Z and could immediately complete it. Thus, I would not recommend making new purchases of the instrument now. However, sales of the tool also do not look very attractive. The US dollar is growing with great difficulty, demand for it is very low, and the low of the previous wave 4 can not be passed. Thus, it is not known what size the entire correction wave will be and what type it will take.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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