FX.co ★ Analysis of GBP/USD on April 21. UK inflation has slightly risen, but markets ignored it

The wave pattern for the GBP/USD pair has slightly cleared up. Thus, it seems that the construction of a new upward trend section is beginning, which can take both a three-wave form and a five-wave one. In the first case, the instrument can still move in triplets of waves in the horizontal direction for some time. In this case, the next top three may already be completed. If the current uptrend turns out to be impulsive, then we are waiting for a more complex wave 3, and at least two more waves as part of this structure. However, the current wave pattern still does not look vague. It should be recalled that the main thing is that the pattern is simple and clear. It is in this case that one can be able to make profit on it. So far, we are waiting for the continuation of growth in the quotes of the instrument in the expectation of building a more complex wave 3.

The strong statistics from the UK led to a fall in British quotes on Tuesday. Although, it is better to say that the demand for the pound declined not because of statistics. The markets ignored the statistics, and the fall began due to the need to build corrective waves from time to time. This explanation is most likely the most logical. On Wednesday, the situation has not changed at all. The UK released its inflation data for March, which showed the following changes. The consumer price index rose to 0.7% in annual terms, and to 0.3% in monthly terms. This means that inflation has slightly risen. At the same time, the core consumer price index rose to 1.1% y/y. Is this good news for the pound sterling? Most likely, they are bad, since any price growth is bad for the monetary unit. However, the pound stopped the decline on Wednesday, which began the day before that, when the statistics were strong. The instrument lost about 20 basis points in the morning, which is not a decline, but a market noise. The Governor of the Bank of England, Andrew Bailey, also had a speech, but so far, no information has been received on this matter. In any case, the GBP/USD pair has started building a correctional wave. Now, the question is what will it be? A new triple down or a correction wave as part of the third wave of a new upward trend?

The wave pattern has currently got clear, so it is recommended to buy the instrument for each MACD upward signal, hoping to build a third wave as part of a new upward trend section. Apparently, the wave pattern is still completely clear and may require additions and adjustments.

The part of the trend, which started on September 23, has taken a five-wave, fully completed form. Thus, this is presumably completed, and the section of the trend after it can take either the horizontal form of alternating triples, or the three waves down that are already completed. Now, a new upward section of the trend has started to form, which will bring the instrument above the peak of the wave 5 in 5. In addition, we do not exclude the option of building a descending structure a-b-c-d-e, which has already been completed. But for now, the first wave of a new ascending section is being built.