FX.co ★ Analysis of GBP/USD on May 27. Pound ignores politics

The wave pattern of the GBP/USD pair remains the same in recent days, as the quotes almost stay in one place. The supposed e wave and its internal wave structure raise serious questions. Its length relative to other waves suggests that it has already completed its formation. However, the pound's high demand does not allow the instrument to start building a new downward set of waves right now. At the same time, the very weak news background does not allow its quotes to move at least in one direction. Thus, the wave e cannot yet be considered complete, and the fact that the last wave is exactly e, cannot be entirely considered either. It was previously mentioned that all the current wave patterns starting from February 2021 raise too many questions. In particular, it is absolutely unclear where the formation of the last upward section of the trend began: the low waves of c and b almost coincide. Thus, the current upward section of the trend may take a more extended form if its construction began on April 9, rather than on March 25. A successful attempt to break through the 0.0% Fibonacci level, which corresponds to 1.4243, can indirectly indicate the readiness to further increase.

This instrument was moving quite actively in the morning, but within the same price range as it has been all week. The picture above clearly shows what is meant. Wave e is marked as completed a week ago, after that, the quotes move strictly sideways, and now it is impossible to determine these microwaves to any larger wave. On Thursday, it became known that the British government made a lot of mistakes and missteps during the first waves of the pandemic. This was openly stated by Boris Johnson's Former Chief Adviser, Dominic Cummings. He accused Boris Johnson, the health secretary, and the entire current government of negligence and incompetence, which simply failed to cope with its direct responsibilities in a difficult moment. Cummings said that Boris Johnson did not take COVID-19 seriously for a long time, which led to a huge number of cases and a crisis in the health system. It is not yet known what will be the answer of the prime minister to these accusations, but this information is really serious and could create pressure on the pound, reducing the demand for it. But instead of a more logical decline, the GBP/USD pair gained about 80 basis points today. Statistics from the United States have nothing to do with it since the quotes' growth began before its release.

At this time, the wave pattern continues to be twofold, so it is suggested to wait for its clarification. Everyone sees that the pound is moving horizontally, making it hard to be traded. At the same time, it is not even clear whether the proposed wave e is already done with its formation. Its internal wave structure looks ambiguous. It is possible to sell the instrument with a protective order above the level of 1.4240, which corresponds to 0.0% of the Fibonacci. But once the level of 1.4240 is broken, buying will be considered.

The upward part of the trend, which started to form a few months ago, is taking on a quite vague form. It was mentioned above that several wave pattern options are possible at once. Unfortunately, different options offer different further developments. Therefore, it may be necessary to wait for some time for the current wave pattern to slightly clear up.