The wave pattern of the GBP/USD pair has entirely not changed in recent weeks. The pound has been strictly in a side channel, namely below the 0.0% Fibonacci level for more than two weeks, and so far remains there. Therefore, after the proposed wave e completed its formation, the correction wave structures began, which are very difficult to determine for any particular wave of the higher scale. An unsuccessful attempt to break through the 0.0% Fibonacci level indirectly indicates the end of not only the last upward wave but also the entire upward trend. On the other hand, the wave pattern of the upward trend can still take on a more complex form, and weak demand for the US dollar only increases the chances of further price growth in the end. A successful attempt to break through the 0.0% Fibonacci level will complicate the upward set of waves. Thus, it is still suggested to trade not from the wave pattern, but from the level of 1.4240 or to not trade at all and just wait for the wave pattern to clear up.
This instrument initially gained 40 basis points, and then lost 60 on Wednesday. Thus, the movement remains with low amplitude in a limited range. There was no news background for this pair right now, and only external news had a slim chance to influence the markets. The other day, it became known that the United Kingdom and the European Union signed the first annual trade agreement. It is noteworthy that some points of the trade deal concluded last year provide for an annual review. We are talking about the "fishing issue", because of which the parties already clashed earlier this year. France accused Britain of preventing its fishing vessels from entering British waters and it became known that the fishing vessels of France complained about the conditions that the British had set for them and which had not previously been in the trade agreement. However, the dispute is now resolved. The agreement provides for a total allowable catch for 2021, as well as quotas for a fish catch by European vessels. The Europeans will have to transfer 25% of the previous catch quota to the UK. This agreement should be valid until 2026. It should be remembered that this is not the only controversial issue. Just a few days ago, it became known that Brussels accuses London of failing to comply with the terms of the Northern Ireland Protocol and may go to court. London sees this step as deliberate pressure on itself, and also believes that this protocol is poorly implemented in practice, and wants to review it. This issue is still under process.
At the moment, the wave pattern continues to be twofold. The pound continues to move almost horizontally. Currently, it is still unclear whether the proposed wave e has completed its construction. It is still recommended to sell the instrument with a protective order above the level of 1.4240, which corresponds to 0.0% Fibonacci. But once the level of 1.4240 is broken, it will be possible to buy. This strategy remains unchanged at this time. Given that the instrument does not make any attempts to break through the specified level, one can simply remain in sales with the Stop Loss set above it.
The upward part of the trend, which started to form a few months ago, is taking on a quite vague form. It was mentioned above that several wave pattern options are possible at once. Unfortunately, different options offer different further developments. Therefore, it may be necessary to wait for some time for the current wave pattern to slightly clear up.
