Wave Analysis:
Yesterday the GBP/USD pair broke through the low of January 4. As a result, we can conclude that correctional wave B has been formed. Meanwhile, we can assume the pair has depicted the beginning of a new downward trend. If it is so, its first targets are placed in the range 1.5980 to 1.5950. Moreover, we cannot exclude possible pullback of the price to the level of figure 61, consequently, wave B will be more complex and extended.
Targets for Down Wave 3 or C:
1.6033 and lower – 423.6% of Fibonacci
1.5950 – 1.5900
Targets for Up Wave (probably 4):
Are not indentified
Summary and Trading Recommendations:
As it was expected, the British currency continues building of a downward pattern of the trend and has completely formed two first waves. At the moment the drop of the quotes may continue in terms of wave 3 or C with targets placed near the level of 1.6033, which is corresponding to 423.6% of Fibonacci and lower in the range 1.5950 to 1.5900. When this wave completes its formation, the rise of the quotes may start in terms of wave 4 or 1, or A of a new uptrend. It is difficult to point out the targets for this wave as formation of wave 3 or C has recently begun. MACD has returned to positive territory having accumulated considerable potential for further movement.
