Wave analysis:
As it was expected, the growth of the quotes is characterized by highly dynamic enabled the GBP/USD pair to test the level of figure 62 during the Friday’s trading session. After that the price reversed 70 points from the reached high. Meanwhile, if such an upward movement is a compounding part of the correction in terms of former downward movement, then the currency pair may decline to the level of 1.6100, or even lower. At the same time, despite a considerable rebound of the pair from the last day of the previous week, there is a possibility that the inner wave structure of the fifth wave will become more complex and the quotes growth to the calculated target placed near the area 1.6290-1.6300 will resume.
Targets for down wave (possibly 3):
1.6067 – 23.6% of Fibonacci
1.5945 – 38.2% of Fibonacci
Targets for up wave:
1.6213 – 323.6% of Fibonacci
1.6288 – 423.6% of Fibonacci
Summary and trading recommendations:
The British pound has completed the formation of the first wave of the correctional trend channel (presumably). In terms of up wave the currency pair continues rising with targets placed near 1.6213 and 1.6288, which is corresponding to 323.6% and 423.6% of Fibonacci. If the current wave is the second in terms of the downward trend channel, then from the current positions the decline of the quotes with targets placed near 1.6067 and 1.5945, which is corresponding to 23.6% and 38.2% of Fibonacci, in terms of wave 3 of the down trend channel, may start. A break of the high of October 1 suggests that the upward trend channel becomes more complex and will lead to the current wave structure should be revised.
