FX.co ★ Wave analysis of GBP/USD for July 8. Markets await GDP data

The wave counting for the Pound/Dollar instrument looks very similar to the wave counting on the Euro/Dollar instrument, but there are still some differences. It can be assumed that all recent movements of both instruments were formed based on the same news background and factors. However, in recent days, instruments have not moved exactly the same way. Today, the European currency received support from the ECB, but the British currency was deprived of that. At the same time, the wave pattern for the Pound/Dollar instrument already looks quite complete, as three waves are visible. However, you cannot be sure of anything now, since any corrective wave at any moment can take on a more complex form, and the entire downward trend segment can take on a five-wave structure. Moreover, the previous two corrective sections of the trend also did not differ in their clarity. The internal wave structure of the assumed a looks very complicated and incomprehensible. Thus, I believe that it is possible to observe the pound for some time until the wave picture becomes clearer.

The Pound/Dollar instrument first lost 60 basis points, and then gained 40 on Thursday. However, in reality, the movements were much more complex. Unlike the euro, the pound had no support or resistance from the news background today. There was no interesting news in the UK. Thus, the markets had to follow only the report on claims for unemployment benefits, which turned out to be slightly worse than the market expectations, which led to a slight decline in the dollar in the afternoon. However, in general, the dollar continues to be in demand, albeit unstable. So far, I am still inclined to believe that the construction of the descending wave c will continue.

If you think about it, the news background practically does not interfere with the construction of this wave at this time. But tomorrow it can have a very strong impact. There will be reports on the UK GDP for May, industrial production for May, trade balance, as well as a speech by the Governor of the Bank of England Andrew Bailey. In the current situation, I am waiting for weak values of reports and "dovish" statements from Bailey, so that wave c would continue its construction in accordance with the current wave counting. There won't be any important economic data in the US tomorrow. The pound may also be experiencing a decrease in demand due to the growing number of COVID-19 cases in the UK. There is a threat to extend the quarantine measures.

At this time, the wave pattern has cleared up a bit. Supposed waves a and b are completed, but wave c is getting more complicated. Thus, I recommend now selling the instrument again with targets located around 1.3645, which corresponds to 38.2% Fibonacci, for each MACD downward signal. I do not set more distant goals now, since wave c can end at any moment.

The upward part of the trend, which began its construction a couple of months ago, has taken on a rather ambiguous form and has already been completed. However, the wave counting still looks rather difficult, as there is no impulse movement now. At this time, presumably, the construction of a downward trend section continues, so we can expect a decline in quotes in the future to the lows of waves c and b.