The wave counting for the Pound/Dollar instrument has become a little clearer recently. It is very important that the markets have not yet managed to make a successful attempt to break through the 23.6% Fibonacci level. The instrument continues to build a new upward wave, which now looks very convincing and definitely does not fit into the wave counting of the previous downward trend section. Therefore, I believe that the downward section of the trend is completed and has taken a five-wave form. Thus, I now expect the construction of at least three upward waves. If this assumption is correct, then the increase in the quotes of the instrument will resume after the construction of a corrective downward wave, which we could observe in the last few days. However, at the moment, wave b does not look complete yet, so the decline may still continue. The targets of the entire upward section of the trend are located near the high of wave e. Therefore, I expect the instrument to increase by another 200-250 points at least. Also, a new upward section of the trend may turn out to be impulsive since its first wave already looks very impressive.
The Pound/Dollar instrument increased by 50 basis points on Thursday. The news background on this day should have been very strong, but in practice, it turned out to be very weak. This is because no important information was received from the Bank of England after its meeting. All the parameters of monetary policy remained unchanged in August, and the speech of the Governor of the Bank of England, Andrew Bailey, was extremely boring. I can only note one point – the number of members who voted for changing the scope of the QE program has increased by one and may continue to grow in the coming months. Unfortunately, Andy Haldane left the MPC and did not participate in the last vote. Thus, there is only one vote in favor of curtailing the program of assistance to the UK economy. However, this is at least something, at least some kind of "hawkish" signal from the British regulator. Therefore, the pound sterling rose yesterday quite rightly. But what will happen today, when reports on the labor market, unemployment, and wages are released in America? I'm talking about three reports at once, but only the Nonfarm Payrolls report will be of key importance. So far, the instrument has failed to make a successful attempt to break through the 1.3868 mark, but a strong report on the US labor market can help in this. Thus, we are waiting for American statistics.
At this time, the wave pattern has become more understandable. The construction of the downward trend section is completed. I continue to count on the construction of a new upward trend section, so at this time, it is possible to buy the instrument for each MACD signal "up" with targets located near the 1.4240 mark, which corresponds to 0.0% Fibonacci, for each MACD signal "up". The instrument could start building a corrective wave 2 or b, but unsuccessful attempts to close at 1.3868 keep the instrument from falling.
The upward section of the trend, which began its construction a couple of months ago, has taken a rather ambiguous form and has already been completed. A new section of the trend can get an impulse form, its first wave has already acquired a sufficiently extended form and exceeded the peaks of waves b and d. The chances of a new strong increase in quotes are growing.
