Wave counting analysis:
On January 2, the GBP/USD pair lost about 135 bp and thus completed the construction of the proposed wave 2 or b. If this is true, then the decline in quotations will continue in the future within a downward wave of 3 or with targets located near the levels of 127.2% and 161.8% on the Fibonacci grid, built on the size of wave 2 or b. At the same time, the news background will still have a strong impact on the movement of the instrument and, accordingly, on the wave pattern.
Buying targets:
1.2815 - 0.0% Fibonacci (formal goal)
Selling targets:
1.2385 - 127.2% Fibonacci
1.2270 - 161.8% Fibonacci
General conclusions and trading recommendations:
The GBP/USD pair has presumably completed wave 2 or b. Thus, I recommend selling the pair, but very cautious, as the current price levels are minimal for the tool, and in the coming weeks there should be clarity on the Brexit question, which can greatly affect the tool. Also, after a strong fall yesterday, today the pair may move to the construction of a correctional wave in the composition of the future 3 or s.
The material has been provided by InstaForex Company - www.instaforex.com