The construction of a downward section of the trend continues. However, the departure of quotes from the reached lows suggests that the entire section of the trend, which begins on September 1, has taken a three-wave form and is already completed. If this assumption is correct, then the current positions may continue to increase quotes within the new upward wave as part of the upward section of the trend that begins on March 19. Naturally, in this case, it will take an even more complex and extended form.
On closer inspection, it is clear that the wave marking really took a three-wave form and at the same time, it looks quite convincing. The failed attempt to break the 61.8% Fibonacci level only further assures me that the descending set of waves is complete. The departure of quotes from the reached lows heavily suggests that the markets are ready to build a new uptrend. However, it is now quite difficult to say what form it will take and whether it will be a continuation of the section of the trend that began on March 19.
All the attention of the markets for the GBP/USD instrument is focused on events related to Brexit. In the last few days, there were quite a lot of important messages that could not be ignored. To begin with, the talks between London and Brussels have been officially extended for another month. This was announced after a meeting between Ursula von der Leyen and Boris Johnson on Saturday. It is not known what exactly the President of the European Commission and the British Prime Minister discussed, but if such a decision was made, then the parties see the point in continuing negotiations though the previous nine rounds ended with no tangible progress. Moreover, it is unclear what will happen now that the Internal Market Bill was approved by the British Parliament and is opposed by the European Union. Will the negotiations just continue regardless of all the problems associated with the bill? In General, there really are a lot of problems so the increase in the quotes of the instrument looks even somewhat strange. The rise of the British Pound can't be justified now. However, the markets can only keep an eye on what is happening as there is nothing else that can be done. Given that the probability of a new decline in the Pound is extremely high, the wave marking may still take a more complex form, and the downward section of the trend may resume its construction.
General conclusions and recommendations:
The Pound-Dollar instrument has presumably completed the construction of a downtrend section. However, at the same time, the instrument can move in any direction from the current positions, complicating any part of the trend. While I lean more to the fact that renewed building of upward trend, the news background from the UK and USA is so controversial that it is unclear what direction the market will decide to move in the near future. A successful attempt to break the 1.3008 mark, which corresponds to 38.2% Fibonacci, will indicate that the markets are ready for new purchases.
