Wave analysis:
Despite prerequisites for starting decline, during yesterday’s trading session the GDP/USD pair continued slow growth and adding the price almost 100 basis points moved to the level 1.5650. Meanwhile, the whole wave structure and inner wave dimension of the whole corrective structure forming after August 21 provides us with the assumption that from the yesterday’s high the pair will start downward movement to the level of figure 55 or even 50 points lower.
Targets for down wave:
1.5409 – 50.0% of Fibonacci
1.5336 – 61.8% of Fibonacci
Targets for up wave:
1.5646 – 11.4% of Fibonacci
Summary and trading recommendations:
The British pound has completed building of upward trend channel and at the moment it is forming a corrective trend. If this assumption is correct, the decline of the quotes will resume in terms of downward trend channel with targets placed near 1.5409 and 1.5336 which is corresponding to 50.0% and 61.8% of Fibonacci. In terms of corrective up wave rise of the quotes may continue with targets placed near 1.5646, which is corresponding to 11.4% of Fibonacci. From the current positions the instrument may start building of new down wave. Upward channel preserves perspectives of continuation of building upward trend channel, break of its lower line gives assuredness that the instrument is ready to build downward trend. The break of the high of assumed wave 5 leads to a more complex upward trend channel.