Wave analysis of GBP/USD for July 12. The pound is ready for a new upward trend section

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The wave counting for the Pound/Dollar instrument looks very similar to the wave counting on the Euro/Dollar instrument. The assumed wave c for the Pound/Dollar instrument can also be completed and can take on a more complex and extended form. The rise in quotes of the instrument on Friday and Monday amounted to about 110 basis points, which led to the exit beyond the previous local peak of July 6. Thus, according to the pound, confirmation of the markets' readiness to build a new upward trend has been received. The three-wave downward wave structure looks quite convincing. Therefore, I am now awaiting the construction of a new three-wave structure upward. Unfortunately, the current news background has practically no effect on the pound and the dollar. And the internal waves of any higher degree waves look very complicated. I recommend paying more attention to these waves and try to work on them.

The Pound/Dollar instrument first lost about 65 basis points, and then increased by exactly the same amount on Monday. Considering that there were no interesting publications and events on Monday, it is very interesting what could have caused quite active movements during the day. The same question can be asked about Friday when the news background from the UK was supposed to cause a new decline in the pound, but then caused its rise. Thus, now we can even assume that the markets work exclusively according to wave counting, and do not pay any attention to the news background at all. On the one hand, this is good. On the other hand, it is unlikely that the markets will be able to easily ignore two speeches by Jerome Powell this week and inflation data in Britain and the United States.

Last Friday showed that the events and economic data of the UK are of little interest to the markets. But will it be the same with US data? We will be able to find out the answer to this question tomorrow when the inflation report is released in the USA. Markets expect this figure to decline from 5.0% YoY to 4.9% YoY. If so, this is a very small change and may not generate any interest in the markets. But if the deviation from the forecast is serious, then the reaction should be expected. So far, I am leaning towards the option that the instrument quotes will continue to rise in the coming weeks. The news background should be strongly in favor of the dollar for the current wave pattern to change.

At this time, the wave pattern has become a little clearer. The construction of the downward trend is supposedly completed. Thus, I recommend now to buy the instrument again with targets located above the 40th figure, for each MACD signal "down". If the instrument makes a successful attempt to break the 40th figure, the upward wave set will take on a more convincing form.

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The upward part of the trend, which began its construction a couple of months ago, has taken on a rather ambiguous form and has already been completed. However, the wave counting still looks rather complicated, as there is no impulse movement now. At this time, presumably, the construction of the downward trend is also completed, so we can expect a new increase in quotes to the maximum of wave e.

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

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