Analysis of GBP/USD on August 23. British pound rose despite weak reports

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The current wave pattern of the GBP/USD pair still looks quite complete. Despite the fact that the proposed wave b turned out to be too deep, it still does not violate the current wave pattern. Therefore, this wave may already be completed, and if this is true, the price will continue to rise with targets located between the high of wave a of the current upward trend section and the 0.0% Fibonacci level, where the construction of the previous upward trend section was completed, within the framework of wave C. In this case, the markets can still build a three-wave upward structure, although there is no question of an impulse structure now. It will be possible to talk about the impulsed five-wave section of the trend no earlier than a successful attempt to break through the level of 1.4239. However, a successful attempt to break through the lows of waves b and e will indicate that the markets will continue to put pressure on the instrument, which may result in the continuation of decline, and the entire wave pattern will require adjustments and additions.

On Monday, the indicated instrument increased by 100 basis points, and this is a very impressive movement. The quotes moving away from the reached lows turn out to be strong, which improves the mood of buyers and shows that the markets are not ready for sales below the 36th figure. However, the news background was extremely weak for the pound. The PMI in the manufacturing sector declined from 60.4 to 60.1 points, and in the services sector from 59.6 and 55.5 points. At the same time, the composite index also fell from 59.2 to 55.3 points. So, it is good that the US statistics on business activity supported the pound after lunch. The index for the manufacturing sector plummeted from 63.4 to 61.2 points, and for the services sector - from 59.9 to 55.2 points. The composite also did so from 59.9 to 55.4. Therefore, the increase of the instrument in the afternoon was already more logical. However, it seems that the markets did not pay any attention to the news background at all today. They had a very clear wave marking, which assumed just an increase in quotes. The US currency has not been able to make a successful attempt to break through the 36 figure and there are few reasons for this now. Perhaps, something will change by the end of the week, when the symposium in Jackson Hole begins, but it's still very early to talk about it now since Jerome Powell's speech is scheduled on Friday.

The wave pattern is now more or less clear. An upward wave is still expected to be formed, so it is currently suggested to consider buying the instrument for each upward MACD signal with targets located around the level of 1.4000. The instrument has supposedly completed the construction of the downward wave b and is ready to increase.

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The upward part of the trend, which started to form a few months ago, took a quite vague form and has already been done. The new part of the trend may acquire an impulsive form, whose first wave acquired an extended form and exceeded the peaks of waves b and d. The chances of another strong growth in quotes are rising. If the information background does not interfere, then the quotes will continue to increase in the near future.

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

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