FX.co ★ Analysis of GBP/USD on December 3, 2020. Irish Foreign Minister: Deal can be reached within 48 hours

In the most global terms, the construction of the upward trend section continues, but the wave marking takes a complex form and may become complicated more than once. The section of the trend that started on September 23 took a five-wave form, but not an impulsive one. A successful attempt to break the previous peak indicates that the markets are ready for further purchases of the pound sterling. The supposed "wave e" has also assumed a five-wave form and may be nearing its end. At the same time, the level of demand for the sterling and the news background are now a priority.

The lower chart clearly shows the a-b-c-d-e waves of the upward trend section. The assumed "wave e" took a five-wave form, which is also visible on the chart. However, even with this complication, it is nearing completion of its construction. Even if the entire upward section of the trend continues to build and complicate, now three waves should be built down, as we clearly see the top five on the chart. At the same time, demand for the pound sterling remains very high, which can lead to more wave extensions.

The topic of Brexit does not leave the front pages of the European and British media, nor the minds of markets and their participants. Indeed, this is the most important topic right now for Britain. However, it has not been a long time since there have been as many reports on the topic of trade negotiations as now. Markets feel that everything should be resolved in the coming days, and the media is happy to pour them more new information.

Almost every day, markets receive comments from Michel Barnier, David Frost, Boris Johnson, various "insider information", "information from sources close to the negotiations" and so on. And often all this information just contradicts each other. Michel Barnier said the other day that he could not guarantee an agreement, as there are still differences between the parties on several of the most important issues.

Ursula von der Leyen, President of the European Commission, also doubts that a deal is possible. Michael Gove and Rishi Sunak urge not to enter into a trade agreement "at any cost". Boris Johnson constantly insists that the deadlines have expired and threatens to end the negotiations. French President Emmanuel Macron says that he will not give in to the issue of access of European (and especially French) fishermen to British waters for the purpose of catching fish. David Frost is pushing for the UK to gain full independence from the EU. And Irish Foreign Minister Simon Coveney believes a deal is achievable in the next 48 hours.

Thus, I would recommend that you continue to wait for official information and not react to rumors and personal opinions of officials and diplomats. Unfortunately, the Brit continues to react to them. After a small pullback from the previously reached highs, the price increase resumed and the instrument added another 100 points during the day.

General conclusions and recommendations:

The Pound-Dollar instrument continues to build an upward trend, but its last wave is nearing completion. Thus, now I recommend that you look closely at the sales of the instrument, but the pound is not yet giving clear signals about the end of the upward section of the trend. At the same time, purchases of the instrument are now quite dangerous, given the uncertainty associated with the trade deal and the current wave markup.