On the global scale, the formation of a new area of the downward trend is likely to continue. However, it is getting clearer every day that everything will end with the waves a-b-c. If so, the quotes may increase from the current levels with the targets located near the peak of the Z wave. A successful attempt to break through the high of the b wave also indicates that markets are ready to buy the instrument. Yet, as in the case of EUR/USD, the internal structure of the upward wave that started on September 23 looks very unusual.

Taking a closer look, we can notice that the wave marking of the area between September 1 and September 23 took a three-wave shape and looks quite normal. An unsuccessful attempt to break through the Fibonacci retracement level of 61.8% indicates that the downward set of waves is complete. Meanwhile, a successful attempt to break through the Fibonacci retracement level 38.2% shows that markets are ready for another increase in the qoutes. For the previous day, the instrument gained around 70 basis points. Consequently, the instrument simply returned to its initial position. A failed attempt to break through the Fibonacci retracement level 50.0% only proves that the upward trend will continue.

Donald Trump has always been the one who likes to change his point of view or deliver controversial statements, which are supported by neither facts nor experts. However, Boris Johnson, who has served as Prime Minister for over a year, often makes misleading statements as well. His cryptic messages are hard to decipher. First, Mr. Johnson announces that negotiations with the European Union will end on October 15. Later, he extends the deadline to November 15. At the same time, Johnson says he is ready to sign a withdrawal agreement with the EU. Then, the prime minister declares that the UK is ready for a no-deal Brexit. The Brexit deal will be discussed today on the EU summit. Nevertheless, market participants do not expect any drastic changes in the matter, as both the European and British officials have stressed multiple times that there has been no progress in talks.

So, what can we expect from the summit? Plenty of issues remain unsolved, including fishing rights, borders between Northern Ireland and the Republic of Ireland, etc. I believe that the parties will not be able to come to an agreement even in a month. Therefore, I'd say that the informational background provides even greater support for the greenback. Apart from that, it is likely to lead to the formation of another downward wave which will only make the whole wave chart even more complex.

General conclusions and recommendations:

GBP/USD has supposedly finished the construction of the downtrend. A successful breakout attempt at the Fibonacci retracement level of 38.2% indicates that the instrument can be bought with the targets at 1.3191 and 1.3480, that is the 23.65 and 0.0% Fibonacci retracement levels. However, against the current information background, the wave chart is likely to become even more complex.