Wave Analysis:

During yesterday’s trading session the GBP/USD pair continued to slide along the median line of the sloping channel. When it had reached the level of 1.5825 it moved 50 basis points up. Thus, being in the range of assumed wave 3 (or C); it is likely that the pair is forming an inner wave structure. If it is so, 1.5800-to-1.5740 levels range may be considered as the first target level.

Targets for Down Wave 3 or C (if the wave is getting more complicate):

1.5837 – 38.2% of Fibonacci
1.5799 – 61.8% of Fibonacci

Targets for Up Wave 4 or 1 or a new Uptrend (it will be revised):

1.5982 – 11.4% of Fibonacci
1.6008 – 23.6% of Fibonacci

Summary and Trading Recommendations:

Downtrend continues its formation. However, wave C may be completed or will complete in the short term if certain conditions are created. The targets for assumed down move are 1.5837 and 1.5799, which is corresponding to 38.2% and 61.8% of Fibonacci in terms of wave 3 or C of downtrend if it complicates its inner wave structure. After its completion up wave 4 or the first wave of a new uptrend with targets 1.5982 and 1.6008, which is corresponding to 11.4% and 23.6%, may start its building. These targets will be revised. The pound continues moving mainly with three-wave wave structures. Divergence of MACD was not observed. Downward channel still preserves the perspectives to resume building of down wave and the whole downtrend.