The section of trend, which began on September 23, has taken a complete five-wave form. However, the internal wave pattern of the supposed wave 5 in 5 is still not fully convincing, which may require some additions and correction in the entire wave 5. Nevertheless, the upward trend has been long nearing its end. In any case, the pound still has high demand. This factor may further complicate the upward section of the trend.

The wave marking in the smaller time frame also made certain changes and might likely be corrected again. Currently, it is quite possible to continue the growth of the pair within the 5 in 5 in 5 wave, although the formation of this wave is quite lengthy. A successful attempt to break down the 127.2% Fibonacci level will indicate that the markets are ready to buy the pound again, which can result in a much more complicated upward trend.

The pound continues to be very near the highs of the entire upward trend, which is regularly updated. In terms of news background, UK's releases were ambiguous. Yesterday, three economic reports – unemployment, applications for unemployment benefits and wages, were better than market expectations. However, it was also became known that the UK was the first among European countries to cross the mark of 100,000 deaths from COVID-19. Among all the countries in the world, the UK is the fifth to reach this mark. It also became known that the International Monetary Fund lowered its forecasts (from 5.9% to 4.5%) for this year's economic recovery in the UK, which is due to COVID-19 and two lockdowns during the winter. It is noticeable that the current news releases were very disappointing and so, the GDP data will most likely disappoint as well. As a matter of fact, the UK economy is really deteriorating at the start of the year, as it cannot function safely in times of strict quarantine. In this case, January's business activity in the service sector also declined to 38 points, which is one of its lowest values among all the EU countries.

Today, markets will be closely monitoring the Fed and Jerome Powell's speech. Any statement by the Fed Chairman about possible new easing of monetary policy may cause a new decline in the US dollar and an increase in the quotes of the pair. The markets continue to be very skeptical about the US currency, and the wave marking of the upward trend section does not yet look fully completed. If the markets ignore the problems of the British economy and their epidemiological situation, might they pay attention to the Fed's actions and statements?

Overall conclusion and recommendations:

The GBP/USD pair continues the construction of the upward trend. Thus, it is now recommended to buy this pair after it successfully breaks through the 127.2% Fibonacci level, with targets located near the 40th mark located within the expected waves 3 in 5 in 5 of the upward trend section. So far, there are no clear hints that the upward section of the trend is already done.