Analysis of wave counting:
Having started the last trading week of the previous year from the upward movement, the GBP / USD pair was able to add about 180 pp in price and finish the Friday session with a breakdown of the level of the 35th figure. The resulting wave situation allows us to assume that during the whole year of 2017, the currency pair was within the limits of a five-wave structure, wave a, in the composition of the corrective B, which in its turn is an integral part of the wave C, C, (A), the main long-term downward trend. If this is the case, then during the formation of the 5th wave, a, B, C, C, (A), the currency pair will continue to rise in quotations in the direction of the level of 1.3800 and further to 1.3870. At the same time, the currency pair retained the potential for a significant complication of the internal wave structure of the 4th wave, a, B, C, C, (A) and price return to the support level corresponding to 1.3060-1.3040.
The objectives for a downward wave option:
1.3065 - 38.2% of Fibonacci
1.2882 - 50.0% of Fibonacci
Goals for developing the option with an upward wave:
1.3800
1.3871 - 161.8% of Fibonacci
General conclusions and trading recommendations:
The pound sterling may resume building a downward set of waves in the composition of 4 while complicating the wave itself with targets located near the calculated marks of 1.3065 and 1.2882, which corresponds to 38.2% and 50.0% of Fibonacci. If this wave is completed, then the increase will continue with the targets located around 38 figures and the 1.3871 mark, which corresponds to 161.8% by Fibonacci.
* The presented market analysis is informative and does not constitute a guide to the transaction.
