The wave counting for the GBP/USD currency pair currently looks quite convincing, but it may require adjustments and additions soon. The third unsuccessful attempt to break through the 1.3873 mark, which is equal to 23.6% Fibonacci level, again led to a departure of quotes from the reached highs, but wave c still does not look fully completed. Thus, I expect the resumption of the construction of this wave and the increase in the quotes of the pair. A successful attempt to break through the 23.6% Fibonacci level will indicate the readiness of the markets for new purchases. Since this is not yet the case, I recommend resuming purchases of the currency pair after receiving confirmation that wave c continues its construction. The targets of wave c can be located between the peak of wave a and the level of 1.4239.
The exchange rate of the GBP/USD pair fell by 70 basis points on Friday. The exit of quotes from the highs reached on September 14 continues. This is due to the meeting of the US Federal Reserve System, which has already begun to influence the movement of the currency pair. It is still impossible to make such a conclusion unequivocally, but last week there were much more positive statistics in the UK than negative ones. The unemployment rate, the number of applications for unemployment benefits, the change in average wages, inflation, all of these reports were better than market expectations. Only the last report of the week – retail trade - turned out to be worse than expected.
Thus, last week, taking into account the statistics, I expected an increase in the quotes of the pair. Especially in combination with the wave counting, which also continues to indicate the construction of an upward trend section. But the Fed meeting has a more important status in the eyes of the markets and it seems that in the last two days, the instrument has been declining only under the influence of this event. The said meeting will last 2 days and will end on Wednesday evening. The Monetary Committee is unlikely to decide on changing rates (it is expected no earlier than 2023), so all the attention of the markets will be focused on the QE program, the completion of which may be announced by Jerome Powell.
A further decrease in the quotes of the GBP/USD pair may lead to the need to revise the entire current counting. Therefore, it is very important that the quotes do not go below the minimum of wave b before Wednesday.
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 for each MACD signal "up" with targets located near the 1.4000 mark (the first target). The pair began building a new internal corrective wave consisting of c. Thus, I recommend waiting for a successful attempt to break through the 23.6% Fibonacci level before resuming purchases. Now there is a danger of changes in the current wave counting.
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 remain quite high.