Wave analysis:
Yesterday the GBP/USD pair was trading in a narrow range fluctuating in the range of 40 points. Meanwhile, despite low market volatility, the price managed to close the ‘window” which was formed on Monday. Thus, it looks like the currency pair is forming the forth wave in terms of upward trend channel starting from the low of August 6. At the same time if the upward movement resumes, the pound which looks rather overbought cannot allow it to rise higher than the levels of 1.6050–1.6080.
Targets for down wave:
1.5866 – 127.2% of Fibonacci
1.5801 – 100.0% of Fibonacci
Targets for up wave:
1.5948 – 161.8% of Fibonacci
1.6000
Summary and trading recommendations:
The British pound continues making inner wave structure of the upward trend more complex. If this assumption is correct, then the rise of the quotes will continue with targets placed near 1.5948, which is corresponding to 161.8% of Fibonacci and if the attempt is successful, then towards the figure 60. The first unsuccessful attempt to break the level of 1.5950 suggests that the pair is ready to build the up wave with targets placed near the levels of 1.5866 and 1.5801, which is corresponding to 127.2% and 100.0% of Fibonacci.
