For the pound/dollar pair, the wave markup continues to look quite comprehensive, but it may still require some adjustments. At this time, the construction of the last internal wave in the composition of C is presumably completed. Judging by the increase in quotes last week, I believe that the construction of a new upward trend segment (at least a corrective one) has begun. Yet, the entire downward trend will take a longer form amid the decline of the pair on Friday and Monday. Until the moment when the low of the e wave in C is reached, a new upward section has begun its construction. The price began to grow also within wave D. When it is completed, the pair may decline within wave E. In general, the wave markup has been simplified a little thanks to the meetings of the Bank of England and the Fed. However, there are plenty of possible scenarios amid the corrective movements in 2021. However, the main scenario remains relevant.
Brexit minister David Frost resigns; GBP is trading steady despite high mortality in the UK due to coronavirus
The pound/dollar pair grew by 60 pips on Tuesday. Apparently, demand for the pair is high despite the upcoming Christmas holiday. Today, the economic calendar is empty. Yesterday, David Frost, who has recently been engaged in negotiations with the EU over post-Brexit arrangements, has left his post. However, the pound sterling is still moving sideways. It seems that market participants ignored this event. Therefore, the British currency is likely to trade in the sideways channel in the coming days or even weeks. Besides, the economic calendar does not contain any crucial economic reports ahead of the holiday. The UK and the US will publish a few reports but they will hardly affect market sentiment. On Wednesday and Thursday, the pair may change the wave picture at least a little. On Friday. trading activity will be low as it is the last day before Christmas. No events and reports are scheduled for Friday. Many market participants will stay out of markets. So, this week is quite calm and no sharp swings are likely to occur.
Conclusion
The wave pattern of the pound/dollar pair looks quite comprehensive now. The wave e could complete its construction. Thus, now, I recommend opening long positions on the pair. The target level is located at 1.3457, which corresponds to 50.0% Fibonacci. Traders should open long trades for each MACD upward signal. However, the pair may get stuck in the sideways channel due to low market activity during holidays. One should be cautious and monitor the market before opening new positions. It is better to place a Stop-Limit Order below the low of wave e in C.
Large timeframe
Since January 6, the construction of a downward trend section has been developing, which may be almost any size and any length. Wave C may be nearing its completion (or completed). However, the entire downward section of the trend may extend and take the five-wave form A-B-C-D-E.
