Wave analysis:
Low volatility of the market trading did not allow the GBP/USD pair to accomplish formation of downward corrective structure, which is developing from the high of August 21 (1.5715). Meanwhile, due to yesterday’s retrace of the price almost to the level of figure 56, it looks like the whole corrective movement takes more complex and extended form. If it is true, there is possibility that the currency pair will make an attempt to decline to the level of 1.5400.
Targets for down wave:
1.5392 – 61.8% of Fibonacci
1.5281 – 50.0% of Fibonacci
Targets for up wave:
1.5643 – 88.6% of Fibonacci
Summary and trading recommendations:
The British pound has accomplished building of upward trend channel and at the moment the pair is constructing the correctional channel. If this assumption is correct, then the decline of the quotes continues in terms of downward trend channel with targets placed near calculated targets 1.5392 and 1.5281, which is corresponding to 61.8% and 50.0% of Fibonacci. In terms of correctional up wave the rise of the quotes may continue with targets placed near the level of 1.5643, which is corresponding to 88.6% of Fibonacci. From the current positions the pair may start formation of a new down wave. The upward channel preserves the outlook of the continuation of building of upward trend channel; the break of its lower line assures us in the readiness of the pair to build downward trend channel.
