Wave analysis:
Yesterday, the GBP/USD pair started the day with a decline. However, the break of the level of figure 55 led to a dynamic rebound from the low of the day (1.5480). Meanwhile, the wave structure, which was observed after yesterday’s downward movement, suggests that the currency pair came into the stage of formation of inner wave structure of wave c in terms of current downward correction, starting from the high of August 21. If it is true, the first target for this wave c may be placed near the level of 1.5420 with the outlook to reach the level of 1.5400.
Targets for downward wave:
1.5529 – 76.4% of Fibonacci
1.5392 – 61.8% of Fibonacci
Targets for upward wave:
1.5700 – 1.5800
Summary and trading recommendations:
The British pound has finished forming uptrend and now is forming of a correctional pattern. If it is true, then a decline will continue in terms of downward trend pattern with targets located near the levels of 1.5529 and 1.5392, which are corresponding to 76.4% и 61.8% of Fibonacci. If wave 5 becomes more complicated, then the upward movement continues with targets placed near the 57 and 58 figures. The upward channel supports the outlook of continuation of uptrend channel, the break of its lower line suggests that a more complex downward channel, probably impulse one, may be forming.
