The wave counting for the Pound/Dollar instrument became clearer after last week's 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 the downward section of the trend has already been completed. Moreover, it has already taken on a five-wave appearance. Thus, I expect the construction of at least three upward waves. If this assumption is correct, then the price increase will resume after the construction of a corrective downward wave, the beginning of which could have already been laid. And the targets of the entire upward trend are located near the maximum of wave e.
Therefore, I expect the instrument to increase by another 200-250 points at least. I would also like to 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 even three waves up, but five.
The Pound/Dollar instrument rose by 40 basis points on Monday and then fell by exactly the same amount. The news background during the first day was very weak. The only report that has been released so far is the index of business activity in the manufacturing sector (PMI), which amounted to 60.4 points against market expectations of 60.4 points. That is, a complete coincidence. The US manufacturing business activity index will also be released, and then the ISM business activity index. In general, the ISM index is considered quite important, and if its value is unexpected for the markets, then perhaps the euro-dollar and pound-dollar instruments will react to it. The markets expect to see a value of 60.8 for the ISM and 63.1 for the usual business activity index.
In the UK, meanwhile, the fourth wave of the pandemic continues to fade. Yesterday, only 24,000 new COVID cases were recorded, which is already two times lower than at the peak of this wave. The government of the country, like many other countries of the world, now focuses on the rates of hospitalizations due to complications from the coronavirus, and not on the number of infections. It is by the number of hospitalizations and the workload of medical institutions that the US and UK governments will be guided this fall when introducing a new quarantine. In America, there is now an increase in cases of coronavirus infection, so this issue is also relevant for the country, although its rate of vaccination, like in Britain, is one of the highest in the world. However, people who have not yet been vaccinated continue to become infected both in the US and in Britain, as well as spread a new, more contagious delta strain.
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