Analysis of GBP/USD on June 7. Markets continue to look for reasons to break through the level of 1.4240

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The wave pattern of the GBP/USD pair has not changed in recent weeks. The pound has been strictly in a side channel, namely below the 0.0% Fibonacci level for more than two weeks, and so far remains there. Thus, after the proposed wave e completed its formation, the correction wave structures began, which are very difficult to determine for any particular wave of the higher scale. An unsuccessful attempt to break through the 0.0% Fibonacci level indirectly indicates the end of not only the last upward wave but also the entire upward trend. On the other hand, the wave pattern of the upward trend can still take on a more complex form, and weak demand for the US dollar only increases the chances of further price growth in the end. A successful attempt to break through the 0.0% Fibonacci level will complicate the upward set of waves. Thus, it is still recommended not from the wave pattern, but from the level of 1.4240.

The indicated instrument was trading in different directions again on Monday. At this time, the markets simply cannot figure out which way to trade. The current demand is not enough to take the instrument out of the narrow range. News late last week had a real opportunity to end this mess, but Friday's economic reports overshadowed Thursday's. As a result, the instrument ended up in the same place where it was at the very beginning of Thursday. The first three days of this week will be extremely boring for the pound. There will be no news that could cause an increase in demand for the dollar or pound. But on Thursday, the US will release inflation for May, and on Friday, there will be several important speeches in the UK by representatives of the Bank of England, as well as several very important reports for the British economy. For example, the volume of GDP for April, industrial production, business activity indices. However, we will have to wait for these important statistics until at least Thursday. The GBP/USD pair may continue to move in the same way in the first three weeks as in the last three weeks. It is difficult to work in such conditions, so we should decide whether it is better to wait for the instrument to get out of the narrow side range or try to trade from the level of 1.4240. However, even the second option is not favorable at the moment, since it was reached only once. The US inflation report may help the instrument to break through the specified level, but again, it will not be earlier than Thursday.

In the meantime, the wave pattern continues to be twofold. The pound is moving horizontally, making it hard to be traded. At the same time, it is not even clear whether the proposed wave e is already done with its formation, as its internal wave structure looks ambiguous. It is recommended to sell the instrument with a protective order above the level of 1.4240, which corresponds to 0.0% Fibonacci. But once the level of 1.4240 is broken, it will be possible to buy. This strategy remains unchanged at the moment.

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The upward part of the trend, which started to form a few months ago, is taking on a quite vague form. It was mentioned above that several wave pattern options are possible at once. Unfortunately, different options offer different further developments. Therefore, it may be necessary to wait for some time for the current wave pattern to slightly clear up.

The material has been provided by InstaForex Company - www.instaforex.com

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