The wave pattern of the GBP/USD pair has entirely not changed in recent weeks. The pound has been strictly in a side channel, namely below the 0.0% Fibonacci level for more than two weeks, and so far remains there. Therefore, after the proposed wave e completed its formation, the correction wave structures began, which are very difficult to determine for any particular wave of the higher scale. An unsuccessful attempt to break through the 0.0% Fibonacci level indirectly indicates the end of not only the last upward wave but also the entire upward trend. On the other hand, the wave pattern of the upward trend can still take on a more complex form, and weak demand for the US dollar only increases the chances of further price growth in the end. A successful attempt to break through the 0.0% Fibonacci level will complicate the upward set of waves. Thus, it is still suggested to trade not from the wave pattern, but from the level of 1.4240 or to not trade at all and just wait for the wave pattern to clear up.
The specified instrument lost about 50 basis points on Tuesday, which did not affect the current wave pattern. It should be noted that Tuesday's news was very weak and the loss of 50 b.p. is not related to any event. However, interesting news came from the environment close to the British government. According to Daniel Moylan, a former adviser to Boris Johnson, the European Union may make a foul move and try to force the UK to return to its membership through pressure on Northern Ireland. Commenting on the differences between London and Brussels regarding the Northern Ireland protocol, Daniel Moylan said that the EU can take advantage of the difficult situation on the island of Ireland, where there were already riots a month ago due to customs checks, problems with the supply of various goods, and so on. Daniel Moylan urges David Frost not to fall for Brussels' ploy. Recently, the Vice-President of the European Commission, Maros Sefcovic, said that the European Union will not be afraid to resort to drastic measures if London continues to violate the points of the Northern Ireland protocol. According to Moylan, this is preparing the ground for bringing Britain back into the EU.
"This is simply using Northern Ireland to take back control of our food and drink sector, and to make it harder for us to negotiate international trade deals," Moylan concluded.
At the moment, the wave pattern continues to be twofold. The pound continues to move almost horizontally, which makes it difficult to trade. Moreover, it is still unclear whether the proposed wave e has completed forming due to its ambiguous internal wave pattern. It is recommended to sell the instrument with a protective order above the level of 1.4240, which corresponds to 0.0% Fibonacci. But once the level of 1.4240 is broken, it will be possible to buy. This strategy remains unchanged at this time. Given that the instrument does not make any attempts to break through the level of 1.4240, one can simply remain in sales with the Stop Loss set above 1.4240.
The upward part of the trend, which started to form a few months ago, is taking on a quite vague form. It was mentioned above that several wave pattern options are possible at once. Unfortunately, different options offer different further developments. Therefore, it may be necessary to wait for some time for the current wave pattern to slightly clear up.
The material has been provided by InstaForex Company - www.instaforex.com