The part of the trend, originating on September 23, has taken on a completed five-wave form. But the internal wave structure of the supposed 5-5 wave still looks not entirely convincing and may require some additions and adjustments. Nevertheless, the upward trend has been nearing its end for a long time. The demand for the pound sterling, however, remains quite high, and this factor may lead to a further complication of the upward trend.
On the younger chart, the wave counting has undergone certain changes and may need to be corrected again. At the moment, the instrument quotes may continue to rise within the wave 3-5-5, although this wave takes on a rather extended form. The internal wave counting of wave 5-5 does not look entirely convincing. In recent weeks, the instrument has been trading mainly between the 100.0% and 127.2% Fibonacci levels. Despite the next departure of quotes from the achieved highs, there is no reason to assume the end of the upward trend section yet.
The situation with the coronavirus in the UK remains tense, although the epidemic has receded slightly in recent weeks. The vaccination process continues and more than 5 million Britons have already received the coveted injections. Unfortunately, more strains of the virus have been reported lately, and some doctors and epidemiologists are not yet sure how to deal with them. Thus, the situation around the world remains rather difficult. Today, British Prime Minister Boris Johnson is due to announce new, tougher rules for crossing British borders. It is expected that so-called "quarantine hotels" will be created for those who have come to the UK from those countries where there is a high level of risk of contracting new strains of coronavirus. In particular, we are talking about the countries of South America and Africa. It also became known that English schools will not resume their work until at least March 8, also for epidemiological reasons. The prime minister of the country said that by mid-February the government should clearly understand what the situation with the pandemic is, and based on this, it will make decisions on easing the lockdown.
As for economic news and reports, there were no such reports in the UK over the past day, and the Fed meeting led to a slight decline in the instrument's quotes. Today, the US will release a fairly important report on GDP for the fourth quarter, which is expected to show an increase of 4.2% compared to the third quarter. In addition, a report on applications for unemployment benefits will be released, which is also important. Especially after Powell's rhetoric yesterday, who said that the recovery of economic indicators is somewhat slowing down and the difficult employment situation in the most affected sectors of the economy is difficult. Probably, it was about small businesses and the service sector.
General conclusions and recommendations:
The Pound-Dollar pair continues to build the upward trend. Thus, at present, I recommend buying the instrument in case of a successful attempt to break the 127.2% Fibonacci level with targets located near the 40th figure, within the expected 3-5-5 wave of the upward trend. So far, there are no clear signals about the end of the upward trend.
