The wave counting is quite clear for the pound/dollar instrument at this time. The instrument successfully broke through the 23.6% Fibonacci mark, so the construction of a downward wave, presumably b, continues. At least there is not a single signal of its completion at the moment. In the same way, the construction of a new upward trend section continues, which at the moment looks like a three-wave. But at the same time, its first wave looks quite convincing, therefore, perhaps, the trend area will take on an impulsive form. However, one should not rush to such conclusions. First, you need to wait for the instrument to make a successful breakthrough of the 23.6% Fibonacci level, which may indicate the completion of the construction of the assumed wave b. In this case, the quotes will go back to rising within the wave c, the targets of which are located above 42 figures. The internal wave structure of the supposed wave b has already taken on a rather extended and complex form, so I expect its completion in the near future.
The pound/dollar instrument increased by 60 basis points on Friday, and it managed to decrease by 40 and rise by almost the same amount on Monday. Thus, such movements in different directions had no effect on the wave counting. There was also no news background in the UK, and one report was released in the US, which only had a moderate impact on the mood of the markets. And so, the pound is also on standby now. Waiting for news and economic reports, which would help it decide on further movement. I expect the pound to continue strengthening, as I believe that the current wave counting looks very convincing. Nevertheless, strong reports from the US may force the markets to pay attention to the dollar again. However, after two months of strong NonFarm Payrolls and generally good reports from America, I think this month will turn out to be weaker than market expectations. This may apply to the recovery of the labor market, and many indicators of business and economic activity. Industrial production and more. The US economy cannot accelerate constantly, and in recent weeks there has been an increase in the number of cases of coronavirus, which can negatively affect economic indicators.
Markets will be analyzing UK unemployment and average wages tomorrow. It will be early in the morning. And in the second half of the day, there will be a report on retail trade in the US, which, according to forecasts, may turn out to be rather weak. One way or another, one should hope for weak data from the US and wait for a breakthrough of the 1.3874 level.
The wave pattern is now more or less clear. The construction of the downward trend is completed. I continue to count on the construction of a new upward wave, so at this time I propose to consider buying the instrument for each MACD signal "up" with targets located around 1.4240, which corresponds to 0.0% Fibonacci. The instrument is still in the stage of building a correctional wave 2 or b, but the wave is weak and the instrument is unlikely to drop below 1.3770.
The upward part of the trend, which began its construction a couple of months ago, has taken on a rather ambiguous form and has already been completed. A new part of the trend may acquire an impulsive form, its first wave has already acquired a rather extended form and exceeded the peaks of waves b and d. The chances of another sharp increase in quotes are growing.
