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Wave analysis of GBP/USD for August 12. Pound declines on weak UK statistics

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The wave counting for the Pound/Dollar instrument has become a little clearer recently. The instrument still made a successful attempt to break through the 23.6% Fibonacci mark, so the construction of a downward wave, presumably b, continues. However, the instrument still remains inside a new upward set of waves, and a slow slide down is the construction of a corrective wave. Therefore, I believe that the downward section of the trend is completed and has taken a five-wave form, and at this time, I expect the constructions of at least three waves up. If this assumption is correct, then the increase in the quotes of the instrument will resume after the completion of the construction of the corrective wave b with the targets located above the peaks of wave a. The targets of the entire upward section of the trend are located near the maximum of wave e, that is, near the calculated mark of 1.4239. I expect the instrument to increase by another 200-250 points at least. I also want to note that the instrument has been moving quite inactive in recent weeks, the amplitude is often very small, which delays the process of completing the expected wave b.

The Pound/Dollar instrument fell by 30 basis points on Thursday, which is even less than Wednesday's movements, which were also not the most active. The markets continue to trade the instrument very cautiously, and it seems that the reason lies in the dollar. Because the Euro/Dollar instrument is also practically immobilized at this time. This suggests that the activity of the market as a whole is now very low. Moreover, neither reports on average level nor important reports help. Today, one of the most important reports in the UK was released - GDP for the second quarter. Although the market expectations completely coincided with the actual value, this does not mean that there should have been no reaction. The second report of the day was industrial production, which, although inferior in importance, is also quite significant. However, all that the markets have managed to demonstrate today is a decline of 30 basis points.

Usually, the Pound/Dollar instrument, even on days when there are no reports at all, passes 70-80 points completely calmly. Thus, I believe that now the same situation has developed for the Pound/Dollar instrument as for the Euro/Dollar instrument. The markets are too cautious and are openly waiting for an impulse or some important event that will allow them to trade more actively.

The wave pattern is now more or less clear. The construction of the downward trend section is completed. I continue to count on the construction of a new upward trend section, so at this time, I propose to consider buying the instrument for each MACD signal "up" with targets located near the 1.4240 mark, which corresponds to 0.0% Fibonacci. The instrument is still at the stage of constructing a corrective wave 2 or b, but the wave is weak and it is unlikely that the instrument will fall below the 1.3770 mark.

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The upward section of the trend, which began its construction a couple of months ago, has taken a rather ambiguous form and has already been completed. A new section of the trend can get an impulse form, its first wave has already acquired a sufficiently extended form and exceeded the peaks of waves b and d. The chances of a new strong increase in quotes are growing.

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