The wave counting for the GBP/USD currency pair has suffered certain adjustments. The instrument has declined by 155 basis points today, and also made a successful attempt to break the low of the previous waves a and e. Thus, we had to make adjustments to the current wave layout. Now it has acquired the form of a downward trend section, which can also be corrective in nature. This assumption is prompted by the internal structure of the proposed wave A, which cannot be called impulsive. The assumed third wave of this trend segment also takes an absolutely non-impulsive form. However, given the length of each wave in the composition of C, we can assume that it will turn out to be very long. If this assumption is correct, then the British pound gets a high probability of continuing the decline with the nearest target located near the level of 50.0%. But, most likely, even around this level, the decline will not stop. Wave C can also take a five-wave form, but it is not impulsive.
The exchange rate of the Pound/Dollar instrument fell by 155 basis points on Tuesday, and this is not the end of the day yet! The news background of an economic nature was practically absent today. There was not a single important report in either the US or the UK in the morning. We can only note the indicator of consumer confidence in America, which fell from 115.2 to 109.3 points, but came out when the instrument had already overcome all 155 points down. Thus, it is obvious that this report did not have any impact on the markets. In addition to this, Janet Yellen and Jerome Powell's speeches also could not cause a strong sell-off of the British currency. Thus, we had to look for the reasons of the general plan. And then it turned out that "fuel chaos" had begun in the UK.
Most gas stations have completely sold out their gasoline, and they cannot deliver new fuel, as there is an acute shortage of truck drivers in the country. Strictly speaking, there is no real fuel shortage in the UK. This was stated by representatives of several fuel networks at once. The problem really lies only in logistics. And this issue is much more serious than the previous one, because for the first time the Freight Transport Association announced a shortage of drivers at the beginning of the year. The association reported that about 20,000 drivers from the European Union left the country after Brexit, and the coronavirus pandemic has further aggravated the problem, since local drivers cannot fully study and pass exams. Also, the UK after Brexit tightened the rules for obtaining licenses for visitors. Now they need to speak English at a sufficient level, which not everyone can boast of. Analysts say that there was a shortage of drivers before Brexit.
The wave pattern has changed dramatically after today's decline. Now the wave pattern has received a descending form, but not an impulse one. Therefore, now I advise you to sell the instrument for each MACD signal with the expectation of building a wave C, which can get quite long, with targets located near the calculated mark of 1.3456, which corresponds to 50.0% Fibonacci level.
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. The construction of the upward trend section has been canceled, and now we can assume that on January 6, the construction of a new downward trend section began, which can turn out to be almost any size.
The material has been provided by InstaForex Company - www.instaforex.com