The wave pattern of the GBP/USD pair has somewhat cleared up due to the quotes last decline. Now, we can say confidently that the formation of the supposed wave e has completed. Consequently, the entire upward part of the a-b- c-d-e trend has ended. If this is really the case, the construction of a new descending section has begun, which may turn out to be three-wave. At the moment, the construction of its first wave a is supposedly completed. If this assumption is correct, then the ascending wave b has begun its formation, which can complete its construction around the 40th figure. The whole wave pattern looks like an alternation of not only correction waves (there are currently no impulse waves) but also as an alternation of correction sections of the trend. The best thing to do now is not to try to understand the internal waves, since the structures of the bigger waves are extremely complex. It is better to try to move with higher-scale waves.
On Tuesday, the specified instrument was inactive due to the empty news background. Nevertheless, the pound has already declined by 300 basis points after the Fed meeting. I believe that the main reason for such an impressive decline is precisely the Fed meeting last week. However, it is also not good to deny that there has been some quite disappointing news coming out of the UK recently. It was already mentioned that the country has seen an increase in cases of various strains of coronavirus in recent weeks, particularly the Indian one. As a result, quarantine is extended until July 19. On another note, the results of the Bank of England meeting will be summed up on Thursday, from which it is not yet clear what to expect. After all, no one expected any surprises from the Fed either.
In general, the markets felt that all the received information deserved a decline in demand for the pound and an increase in the dollar. The same could be the case on Thursday. Everything will depend on how the markets interpret all the information. In addition, it became known that the export of food and beverages from the UK to the EU decreased in January-March 2021 almost twice compared to the same period last year. This was stated in the corresponding report of the Federation of Food and Beverages. However, this data is difficult to interpret clearly, since the pandemic factor was also present in the last year in addition to Brexit. However, the figures, which regularly indicate a reduction in trade between the EU and Britain, should still strain, especially London. At the moment, the wave pattern is considered to be more important than the news background. So, we expect to build the next correction pattern.
The wave pattern has slightly cleared up. However, the assumed wave a may already be completed. If so, then the expected wave b has begun its formation, whose targets are seen 100-150 points above the current levels. Thus, it is suggested to buy the instrument for each upward signal of the MACD indicator. So far, it seems that wave b is not yet already done.
The upward part of the trend, which started to form a few months ago, is taking on a quite vague form and has already been completed. However, the wave pattern still looks complicated, as there is no impulse movement at the moment. It can be assumed that the formation of a new low of the three-wave downward trend section has begun. Thus, we can expect the quotes to decline to the lows of waves c and b in the future.
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