The wave counting for the GBP/USD currency pair currently looks quite convincing but may soon require adjustments and additions. The third unsuccessful attempt to break through the 1.3873 mark, which is equal to 23.6% Fibonacci level, again led to the exit of quotes from the reached highs, and wave c still does not look fully completed. Thus, I expect the resumption of the construction of this wave and the increase in the quotes of the pair. However, given the strong decline in the quotes, the chances of resuming the construction of the expected wave c are decreasing. The British pound does not have many chances to resume the construction of the expected wave c. One of these chances is an unsuccessful attempt to break through the 38.2% Fibonacci level, to which the instrument has already declined. In this case, the entire wave c will take a much longer form and a much more complex structure. A successful attempt to break through the 38.2% Fibonacci level is almost guaranteed to lead to the need to revise the entire wave counting.
The exchange rate of the GBP/USD pair fell by another 70 basis points on Monday. The exit of quotes from the highs reached on September 14 continues. I still believe that the upcoming meeting of the Fed is to blame for everything, which has already begun to influence the movement of the pair. However, the fact that the EUR/USD moved with a minimum amplitude on Monday, suggests that perhaps it is not just the Fed meeting that is the matter. After all, the Bank of England is also scheduled for a meeting this week, which will also be of great importance for the pound. Everyone expects the Fed to taper QE, but few analysts expect the same decision from the Bank of England.
Another significant catalyst for the pound is the issue with Scotland. Recently, Prime Minister Nicola Sturgeon said that she hopes to get permission from London to hold an independence referendum and made it clear that her country will not back down from its position on this issue. Sturgeon expects to hold a referendum before the end of 2023. If London does not provide official permission, Scotland is ready to hold it without permission, and then through the courts to prove the legitimacy of separation from the UK, since this will be the will of the people (if the people vote for separation).
Thus, the UK now faces even more significant issues than the monetary policy of the Fed or the Bank of England. And the pound sterling remains the last chance to resume the increase. To do this, it is necessary to stay above the 1.3641 mark.
The wave pattern is now more or less clear. I still expect the construction of an upward wave, so at this time I suggest considering buying the pair for each MACD signal "up" with targets located near the 1.4000 mark (the first target). The GBP/USD pair began building a new internal corrective wave consisting of c. Thus, I recommend waiting for a successful attempt to break through the 23.6% Fibonacci level before resuming purchases. You can also wait for an unsuccessful attempt to break through the 38.2% Fibonacci level, which may also mean the completion of the internal corrective wave in the composition of c.
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 acquired a sufficiently extended form and exceeded the peaks of waves b and d. The chances of a new strong increase in quotes remain quite high.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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