Wave analysis:
During yesterday’s trading session, the GBP/USD pair continued formation of the second wave, or b, in terms of downward corrective structure, starting from the highs of October 1-2. Meanwhile, despite the considerable price fluctuations, the currency pair could not resume decline towards the calculated corrective levels placed between the levels of 1.5945 – 1.5845. At the same time, the second wave which looks almost completed second wave, or b, assumes the possibility that the downtrend from the yesterday or considerably higher starts.
Targets for new down wave:
1.5945 – 38.2% of Fibonacci
1.5846 – 50.0% of Fibonacci
Targets for up wave (possibly 2 or b):
1.6142 – 200.0% of Fibonacci
1.6169 – 11.4% of Fibonacci
Summary and trading recommendation:
The British pound has finished building of uptrend price pattern. The decline of the quotes may continue with targets placed near the levels of 1.5945 and 1.5846, which is corresponding to 38.2% and 50.0% of Fibonacci, in terms of wave 3 or from the correctional downtrend price pattern. In terms of upward wave, possibly 2, or b, the currency pair continues rising with targets placed near 1.6142 and 1.6169, which is corresponding to 200.0% and 11.4% of Fibonacci. Unsuccessful attempt to break one of these levels suggests that the pair is ready to build downward wave 3 or c.
