The wave counting for the Pound/Dollar instrument became a little clearer after Wednesday. Thus, the instrument continues to build a new upward wave, which now looks very convincing and definitely does not fit into the wave counting of the previous downward trend section. I believe that this section of the trend has already been completed. Thus, I expect at least three upward waves to form. If this assumption is correct, then the price increase will resume after the construction of a corrective downward wave, which could have started just today. And the targets of the entire upward trend section are located near the maximum of wave e. Therefore, I expect the instrument to increase by another 200-250 points at least. I also draw your attention to the fact that the first wave of a new upward trend section looks completely different from any wave between February 24 and July 20. Thus, a new section of the trend has a good chance of becoming impulsive. In this case, we are waiting for not three upward waves, but five.
The Pound/Dollar instrument fell by only 50 basis points on Friday, so it's too early to even talk about building a corrective wave. Rather, the markets on Friday decided to fix part of the profit on purchases, and at the same time adjust the dollar a little. The euro and the pound showed almost the same movements today, although there were many important statistics in the European Union and none in the UK. However, the markets did not pay any attention to it, which suggests that they were already preparing for a decline in the instrument. At least, the American markets. By the way, American statistics could hypothetically cause an increase in demand for the dollar. However, it did not look strong from the very beginning. The report on the income levels of the American population showed an increase of 0.1%, and expenses by 1.0%.
As we can see, the changes are not so significant anymore. And at the time of the release of these data, the markets just did not reduce the demand for the pound and euro. Thus, I believe that the statistics today have not been worked out by the markets at all. In the UK, there is no economic news at all right now. All the latest news related to the negotiations between Brussels and London regarding the Northern Ireland protocol, which promise to drag on for many months or even a couple of years. So far, the pound does not react to this news, so I think that it is best to pay close attention to the wave counting now. Fortunately, it has at least cleared up a little.
At this time, the wave pattern has become more understandable. The construction of the downward trend section is completed. I continue to count on the construction of a new upward trend section, so at this time it is possible to buy the instrument for each MACD signal "up" with targets located near the 1.4240 mark, which corresponds to 0.0% Fibonacci, for each MACD signal "up". Today, the construction of a corrective wave 2 or b could begin.
The upward section of the trend, which began its construction a couple of months ago, has taken a rather ambiguous form and has already been completed. A new section of the trend can get an impulse form, its first wave has already acquired a sufficiently extended form and exceeded the peaks of waves b and d. The chances of a new strong increase in quotes are growing.
The material has been provided by InstaForex Company - www.instaforex.com