Analysis of GBP/USD on August 28th. The British pound has promising prospects for a decline
August 28, 2023 5:25 pm
The wave analysis for the GBP/USD remains relatively simple and clear. The construction of the ascending wave 3, or possibly c, is complete. A presumed new descending trend section has begun, which could still be wave d, but the likelihood of this is approaching zero. There’s no reason for the pound to resume its rise. However, the wave pattern has transformed into a more complex one, and wave 3 or c has taken a more extended form than many analysts expected a few months ago. The ascending trend section might still take on a five-wave form if the market finds new reasons for long-term purchases.
In any case, I anticipate the continuation of a descending wave, which has started almost precisely on schedule. If the current wave forms a five-wave internal structure, it can be considered the first impulse, and we can expect a further fall in the pound (after the construction of a corrective wave 2 or b). Three attempts were unsuccessful to break the 127.2% Fibonacci level, but the fourth one succeeded. Thus, there are currently no signs of the first wave’s completion.
Demand for the pound is gradually decreasing.
The GBP/USD rate increased by ten basis points on Monday, which is very little. Monday’s movement amplitude was minimal, so it’s best not to count points but to conclude that the pair remains stagnant against an empty news and report calendar. This scenario is often the case on Mondays, so I see nothing unusual about it. What’s more interesting is what will happen later this week because there will be many important reports. Most will be released in the US, but we will discuss this separately.
We can also examine the pound’s wave pattern in more detail today. The key event is the successful attempt to break through the 1.2618 mark, equivalent to 127.2% on the Fibonacci scale. The pair rebounded from it three times but overcame it on the fourth attempt. Given this, we can expect a further decrease in demand for the British pound, which aligns with my market perspective.
Since there will be many important reports in the US this week, we can expect the pair to rise as not all reports will favor the dollar. However, we are currently witnessing a descending trend section, and even if we see an ascending wave, it will be corrective and should not change the market’s bullish sentiment. Based on the above, the pair’s decline will continue. Hence, we should look for selling signals and consider short positions rather than the opposite.
General conclusions.
The wave pattern for the GBP/USD pair suggests a decline within the descending trend section. There’s a risk of concluding the current descending wave if it’s wave d and not wave 1. In this case, the construction of wave 5 might begin from the current levels. However, we are currently witnessing the construction of the first wave as part of a new downward trend section. The successful attempt to breach the 1.2618 mark, which corresponds to 127.2% on the Fibonacci scale, indicates the market’s readiness for new sales. I advise selling with targets located around the 1.2443 mark.
The picture resembles the EUR/USD pair on a larger wave scale, but there are still some differences. The descending corrective trend section is complete, and the construction of a new ascending one is ongoing. It may have already concluded or could evolve into a full-fledged five-wave form.
The material has been provided by InstaForex Company – www.instaforex.com
The wave analysis for the GBP/USD remains relatively simple and clear. The construction of the ascending wave 3, or possibly c, is complete. A presumed new descending trend section has begun, which could still be wave d, but the likelihood of this is approaching zero. There’s no reason for the pound to resume its rise. However, the wave pattern has transformed into a more complex one, and wave 3 or c has taken a more extended form than many analysts expected a few months ago. The ascending trend section might still take on a five-wave form if the market finds new reasons for long-term purchases.
In any case, I anticipate the continuation of a descending wave, which has started almost precisely on schedule. If the current wave forms a five-wave internal structure, it can be considered the first impulse, and we can expect a further fall in the pound (after the construction of a corrective wave 2 or b). Three attempts were unsuccessful to break the 127.2% Fibonacci level, but the fourth one succeeded. Thus, there are currently no signs of the first wave’s completion.
Demand for the pound is gradually decreasing.
The GBP/USD rate increased by ten basis points on Monday, which is very little. Monday’s movement amplitude was minimal, so it’s best not to count points but to conclude that the pair remains stagnant against an empty news and report calendar. This scenario is often the case on Mondays, so I see nothing unusual about it. What’s more interesting is what will happen later this week because there will be many important reports. Most will be released in the US, but we will discuss this separately.
We can also examine the pound’s wave pattern in more detail today. The key event is the successful attempt to break through the 1.2618 mark, equivalent to 127.2% on the Fibonacci scale. The pair rebounded from it three times but overcame it on the fourth attempt. Given this, we can expect a further decrease in demand for the British pound, which aligns with my market perspective.
Since there will be many important reports in the US this week, we can expect the pair to rise as not all reports will favor the dollar. However, we are currently witnessing a descending trend section, and even if we see an ascending wave, it will be corrective and should not change the market’s bullish sentiment. Based on the above, the pair’s decline will continue. Hence, we should look for selling signals and consider short positions rather than the opposite.
General conclusions.
The wave pattern for the GBP/USD pair suggests a decline within the descending trend section. There’s a risk of concluding the current descending wave if it’s wave d and not wave 1. In this case, the construction of wave 5 might begin from the current levels. However, we are currently witnessing the construction of the first wave as part of a new downward trend section. The successful attempt to breach the 1.2618 mark, which corresponds to 127.2% on the Fibonacci scale, indicates the market’s readiness for new sales. I advise selling with targets located around the 1.2443 mark.
The picture resembles the EUR/USD pair on a larger wave scale, but there are still some differences. The descending corrective trend section is complete, and the construction of a new ascending one is ongoing. It may have already concluded or could evolve into a full-fledged five-wave form.
The material has been provided by InstaForex Company – www.instaforex.com
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