Wave analysis of GBP/USD for June 16

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The wave counting for the Pound/Dollar instrument has not changed at all in recent weeks. The British pound continues its unhurried retreat from the previously reached highs around the 0.0% Fibonacci level. But even this slight decrease in quotes does not have a strong impact on the counting. Thus, after the supposed wave e has completed its construction, corrective wave structures continue, which are still very difficult to attribute to any particular wave of a higher scale. Yes, and it does not make much sense, since it is unlikely to work them out anyway. An unsuccessful attempt to break through the 0.0% Fibonacci level indirectly indicates the completion of not only the last upward wave but also the entire upward trend section. On the other hand, the wave counting of the upward trend can still take on a more complex form, and the weak demand for the dollar only increases the chances of a further increase in quotes in the end. A successful attempt to break the 0.0% Fibonacci level will lead to a complication of the upward set of waves.

The Pound/Dollar instrument gained about 50 basis points on Wednesday but began to decline in the afternoon. The news background in the UK was quite interesting, as the markets were eagerly awaiting the release of British inflation in May. As it turned out, the consumer price index rose to 2.1% on an annualized basis and 0.6% on a monthly basis. However, even though prices in the UK have already risen more than the Bank of England set for itself, the markets took this information positively. Let me remind you that earlier representatives of the Bank of England hinted several times at a possible tapering of the program of assistance to the economy, and even at an increase in the main rate. Thus, the rise in inflation brings the Bank of England closer to such a step. On the other hand, the latest news from the health sector does not please the markets.

The UK has extended quarantine for one month as cases of the Indian strain of coronavirus have been on the rise. Thus, the economic recovery in the current and next months may slow down a little, and the Bank of England may abandon the premature tightening of monetary policy. So, even with the information background, the situation is ambiguous. Markets also continue to await the summing up of the results of the Fed meeting, which will become known in a few hours. And although at this time few people are counting, there is reason to expect that important information will be. Jerome Powell at the press conference will definitely comment on the current state of the American economy, which can help the markets to trade more actively in the evening than in recent days and even weeks.

At this time, the wave pattern continues to be twofold. The sterling continues to move almost horizontally. It is still unclear whether the proposed wave e has completed its construction. I have already recommended selling the instrument with a protective order above 1.4240, which corresponds to 0.0% Fibonacci. And if the level of 1.4240 is broken, buy. Considering that the instrument does not make any attempts to break through the 1.4240 level, one can simply remain in sales with the Stop Loss set above 1.4240. However, a surge in market activity is possible tonight. Be careful!

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The upward trend, which began its construction a couple of months ago, is taking on a rather ambiguous form. As I said above, several wave counting 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 counting to clear up a little.

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

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