The construction of a new downward section of the trend-- that is expected of the first wave-- continues. So, for now, I can't say anything other than that the decline in quotes is likely to continue; although everything will depend on the news background for the British. After several months of appreciation, markets have started to sharply reduce demand for the British currency though the US dollar itself does not have enough reasons to increase. In the instrument with the Euro currency, for example, it does not grow at all. Thus, everything now depends on the news from the UK as well as the attitude of the markets to them. Based on the wave markup, a correction wave should now be built.
During the last trading day, the GBP/USD instrument gained about 70 basis points and presumably completed the construction of wave 1 or A as part of a new downward trend section. If this assumption is correct, then the increase in quotes will continue within wave 2 or B with targets located near the 30 figure. Even if the section of the trend that begins on September 1 takes a three-wave form, we should witness another wave down. I believe this is a working option for the time being.
The news background from the UK remains negative but has improved over the last trading day despite the fact that the parliament approved in preliminary reading the bill on the internal market. This allows the British government to violate a number of agreements on the regime on the border of Northern Ireland. Boris Johnson believes that the EU can impose unreasonable duties, tariffs, and quotas on the movement of goods to Northern Ireland from the rest of the UK. Therefore, the current bill is intended to cancel some points of the agreement of the protocol on Northern Ireland in the Brexit agreement. According to Boris Johnson, London will not necessarily implement them in practice. First, if a trade agreement with the European Union is reached, it will contain new agreements on Northern Ireland and trade with this country. Secondly, if the European Union refrains from unreasonable actions on this border and does not arrange a "food blockade", then Johnson is not going to violate the previously reached agreements. In General, this document, according to the Prime Minister, is insurance against future possible threats from the European Union.
Thus, for a few days, the markets can arrange a time-out for the British as the tension subsided when it became known that the new bill will not necessarily violate the agreements between the EU and Britain. However, concerns remain, and the British will remain under pressure in the near future. This is also indicated by the wave marking.
General conclusions and recommendations:
The Pound-Dollar instrument presumably completed the construction of the upward wave Z and the entire upward trend section. However, there is now a high probability of building a correction wave 2 or B. If you look only at the wave picture, I would say that now the instrument has a good opportunity to return to the level of 1.3013, which corresponds to 38.2% Fibonacci after which it is likely to resume the decline in quotations.
