On the global scale, the wave counting seems to become much more complex. The downward section of the trend is probably completed after all, and is bounded by waves a-b-c. As a result, a new upward global wave could now begin its construction, which will further lengthen and complicate the entire upward section of the trend that dates back to March 19. However, the first waves in this global wave take a very non-standard form, so the scenario is unlikely to unfold. The news background can send the pound sterling to an abrupt fall — the area of 25 figures and even lower.
At a closer observation, it can be seen that the wave marking of the section between September 1 and 23 took a three-wave form and looks quite convincing. Unsuccessful attempts to break through the 61.8% and 50.0% Fibonacci levels led to the fact that the price increase resumed. However, as stated above, the news background can play a cruel joke on the British at any time. So far, everything looks as if the upward trend section will be resumed. However, the instrument can also move in three-wave corrective structures, just like the EUR/USD instrument.
There is still very little positive news for the pound. Bank of England Governor Andrew Bailey's speech yesterday provided no new information. The instrument's quotes began to move away from the reached highs, failing to make a successful attempt to break the 23.6% Fibonacci level. The wave layout now allows either the construction of a new global rising wave, or an unlimited number of three wave structures. There is no news on Brexit and the Brexit negotiations. It became known only that the parties again agreed to continue negotiations in order to try to come to an agreement.
No statistical information has been received from the UK for a long time. The fact that the British economy is going through a rough time is clear even without statistics. While the whole world is suffering because of COVID-19, the British economy is suffering because of these reasons: the pandemic, Brexit, and the lack of a free trade agreement with the EU. This morning, retail sales data for September were released, which showed exceeding market expectations. In September, sales increased by 4.7% YoY and 1.5% MoM. Despite the data, there were no reactions from the British. Plus, the markets may pay less attention to the business activity indices that will be released any minute and the business activity indices in America in the afternoon. For the British and American, other news topics are in the first place. Therefore, more attention will be paid to news about the coronavirus, the elections in America, and the topic of Brexit.
General conclusions and recommendations:
The pound-dollar instrument presumably completed the construction of a downward section of the trend. A successful attempt to break through the 38.2% level shows that the instrument can be bought with the targets located near the 1.3191 and 1.3480 marks, which corresponds to 23.6% and 0.0% Fibonacci, for each new MACD signal up. But the current news background for the tool can lead to a strong complication of the current wave markup at any time.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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