The section of the trend, which originates on September 23, took a five-wave fully completed form. However, the wave counting can become more complex as many times as you like, nevertheless, at the moment everything looks like a completed wave structure. The increase in the quotes of the instrument in the last week is interpreted as a corrective wave b as part of a new downward correction structure of waves. However, a successful attempt to break the maximum of the expected wave 5 in 5 will indicate the readiness of the markets for new purchases of the pound sterling.
On the lower chart, the wave marking also looks quite convincing and also allows for the option in which the entire section of the trend will take a more complex form. On the approach to the maximum of the expected wave 5 in 5, the pair's quotes turned down and began to retreat. Thus, the current wave marking has been preserved and now assumes the construction of a descending wave c with targets located below the minimum of the expected wave a.
Everything I wrote in the article on the Euro/Dollar instrument applies in some way to the Pound/Dollar. There is a certain news background, but it has no meaning for the markets. Markets have been at the mercy of Brexit and trade negotiations between London and Brussels for several years. In a couple of days, Brexit will be officially completed, and the trade deal, if not yet signed, will be agreed upon and will come into effect on January 1, which is the same thing. The European Parliament has already said that it is going to ratify the agreement at a scheduled session in March and has made a proposal to extend the temporary application of the deal, which currently expires at the end of February.
Let me remind you that the entire document on the future relations of the UK and the EU occupies 1240 pages, which need to be studied in detail before voting "yes". This is exactly what the members of the European Parliament wants to do in the next two months. The main thing is that there should be no surprises in the form of the fact that any EU country will not be satisfied with the agreement and will veto it. But so far, it seems that everything will be fine.
Thus, now we need to bring the current year to its logical conclusion as calmly as possible, and build new plans and strategies next year. Moreover, now it is still impossible to draw any conclusions regarding the new downward section of the trend. There are also no economic reports during the holidays, and no other important events are planned.
General conclusions and recommendations:
The Pound-Dollar instrument has presumably started building a new downward trend section. Thus, I currently recommend selling the pair for each MACD signal "down" with targets located around the 32nd and 31st figures, within the expected first (global) wave of a new downward trend section. A successful attempt to break the maximum of the wave 5 in 5 will indicate the readiness of traders for new purchases of the pound and cancel the option of building a new downward trend.
