Wave counting analysis:
In the course of trading on October 16, the GBP / USD pair added about 30 base points. However, the expected wave 2, 5, may become more complicated and take the 3-waveform. Also, the results of the Brexit negotiations will be of great importance for the pound sterling. If the negotiations end in nothing, it may cause sales of the pound, which will lead at least to a strong complication of wave 2, and as a maximum to the construction of a new downtrend trend. If the parties do agree on the terms, the current markup is likely to retain its integrity.
The objectives for the option with purchases:
1.3295 - 100.0% of Fibonacci
1.3397 - 127.2% of Fibonacci
The objectives for the option with sales:
1.2922 - 0.0% of Fibonacci
General conclusions and trading recommendations:
The GBP / USD currency pair continues to build the estimated wave 5 and the internal wave 2. However, since today and tomorrow, the market can receive an unexpected and important information on the results of the Brexit negotiations, an increase in the amplitude of trading is possible. Thus, I recommend reducing any transactions to the receipt of information on the results of the negotiations. After that, if you do not need to make adjustments to the current wave counting, I recommend sticking to the working version, which involves the construction of an upward trend section.
The material has been provided by InstaForex Company - www.instaforex.com