The construction of the expected new upward section of the trend continues. The internal wave layout has gotten confused, as the third wave takes on a rather non-standard appearance, and under certain conditions it may even be completed. The wave marking of this instrument is similar to the wave marking of the EUR/USD instrument. Starting from September 1, both can have two three-wave structures built. After which the construction of a new downward structure, a three-wave form can begin.
The wave markup on the lower chart does not look too convincing and clear. The rising wave 3 or C looks as if it has already completed its construction or, on the contrary, will take a very extended form. An unsuccessful attempt to break through the 38.2% Fibonacci level suggests that the increase in the instrument's quotes will resume. The entire section of the trend starting on September 1 can take a w-x-y form. You need to be prepared for the complexity of the wave structure.
There is currently no news for the Pound at all right now. Negotiations in London continue while markets continue to wait for information. The Pound has fallen slightly in the last few days, which does not correspond to the current wave marking but it can easily jump up by 100 or 200 points if there is true progress in the negotiations. We can now conclude that the markets are just waiting for more information. In the issue of a trade deal, it should also be understood that the issue is not only in the European Commission or the European Council, which negotiate on behalf of the entire EU. Each of the 27 EU member states have its own interest in the UK. For example, France does not want to give up fishing in British waters and may block the deal if its interests are not taken into account. After all, all 27 members of the bloc must vote approving the trade agreement with London. If France, as one of the most powerful members of the EU, refuses to ratify the agreement, then there will be no deal. Thus, I personally do not have any hopes for a successful outcome of the negotiations. If Michel Barnier and David Frost really manage to do the impossible and come to an agreement, this will be very good news for the pound, which can immediately begin to enjoy increased demand in the foreign exchange market and continue building an upward wave that begins on September 23. Today, a fairly important indicator of US GDP for the third quarter will be released, which, unfortunately, is expected to be very high (+31%). This may cause demand for the Dollar. A successful attempt to break through the 50.0% Fibonacci level will lead to the need to clarify the current wave markup.
General conclusions and recommendations:
The Pound-Dollar Instrument has presumably completed the construction of a downward trend section. A successful attempt to break the minimum of wave 2 or b will indicate that the markets are not ready for new purchases of the British Pound, and the entire wave marking can be transformed into a more complex one. If the 1.2860 mark is broken, the option of building an upward wave will be canceled. While this has not happened, the increase in quotations may still resume with targets located near the calculated marks of 1.3189 and 1.3480 which corresponds to 23.6% and 0.0% for Fibonacci.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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