The wave counting on the Pound/Dollar instrument still looks quite integral at this time. Despite the fact that the proposed wave b turned out to be too deep, it still does not violate the wave counting. The exit of quotes from the lows reached in recent days indicates that wave b may already be completed. Thus, the markets can still build a three-wave upward structure, although there is no question of an impulse section of the trend. It will be possible to talk about the five-wave impulse section of the trend no earlier than a successful attempt to break through the level of 1.4239, which is the peak of the previous upward trend section. But a successful attempt to break through the lows of the last waves b and e will indicate that the markets are going to continue to put pressure on the instrument, as a result of which it may continue to decline, and the entire wave counting of the downward section will require adjustments and additions. This scenario is possible, from my point of view, only if the dollar receives strong support from the news background. For example, Jerome Powell will still announce tomorrow that the Fed is ready to complete the asset purchase.
The Pound/Dollar instrument did not move more actively on Thursday than it did a day earlier. Yesterday, the amplitude was 35 basis points, and today it is 25. Thus, the movements of the instrument remain weak. The deviation of quotes from the reached highs today is too weak to consider the completion of the construction of an upward wave seriously. Nevertheless, the news background had a certain impact on the mood of the markets. The quotes of the British pound have been declining since the very night, but in the second half of the day, they continued this movement against the background of higher than earlier GDP in the US in the second quarter. Let me remind you that in the first estimate, GDP was 6.5% QoQ, and in the second – 6.6% QoQ. However, this report can be considered twofold, as the markets expected to see an increase to 6.7% QoQ. That is, the real value was lower. Therefore, the big question is whether the British pound declined today under the influence of the news background.
Also in America, the report on applications for unemployment benefits in the United States was released today. However, both the primary and secondary numbers turned out to be almost completely equal to the expectations of the markets. Thus, despite the decrease in the quotes of the instrument by 50-60 basis points during the day, the wave counting has not changed in any way and no special conclusions can be drawn in this regard. All the attention of the markets is still focused on Jerome Powell's speech tomorrow.
The wave pattern is now more or less clear. I still expect the construction of an upward wave, so at this time I suggest considering buying the instrument for each MACD signal "up" with targets located near the 1.4000 mark (the first target). The instrument, presumably, has completed the construction of the downward wave b and is ready to increase.
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 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. If the news background does not interfere, then the increase in quotes should continue in the near future.
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