FX.co ★ Analysis of GBP/USD on September 6. The British pound greeted Liz Truss, but what's next?

For the pound/dollar instrument, the wave marking at the moment looks quite complicated but does not require any clarifications. The upward wave, built between May 13 and May 27, does not fit into the overall wave picture, but it can still be considered corrective as part of the downward trend section. Thus, it can now be concluded that the downward section of the trend takes a longer and more complex form. We have completed waves a, b, c and d, so we can assume that the instrument continues to build wave e. If this assumption is correct, then the decline in quotes may continue in the near future. However, I remind you that if impulse structures can become more complicated and lengthen, then corrective ones are even more so. Given the news background and the fact that the Fed will not stop raising interest rates now, the entire downward trend section may take a much longer form. A successful attempt to break through the 1.1708 mark, which corresponds to 161.8% by Fibonacci, indicates that the market is ready for new sales of the British. At the same time, the low of wave e is already much lower than the low of wave c, so wave e can end at any time.

The demand for the British pound has increased slightly.

The exchange rate of the pound/dollar instrument increased by 65 basis points on September 6 and yesterday – by 15 points. It was possible to roll back by 100 points from the lows reached on Monday. Such a value does not allow us to conclude even about the completion of wave e, not to mention the entire downward trend section. The gas crisis is developing not only in the European Union but also in the UK, which at the beginning of the year refused to buy oil and gas in Russia. Nevertheless, there are not enough energy resources in Britain, so the decision to develop new gas fields in the North Sea and build new nuclear power plants has already been approved. However, the solution to these issues will take quite a long time. Still, for now, production, electricity, and heating largely depend on gas, which is already in short supply and has already increased to $ 3,000 per 1 thousand cubic meters. According to analysts, the price may continue to rise since the colder it gets, the greater the demand for gas will be among the population and enterprises. And the supply is unlikely to increase. The new Prime Minister of the United Kingdom, Liz Truss, has already stated that a price ceiling will be set for energy companies to sell energy to households. The state will compensate for all losses. Value-added tax may also be reduced so British citizens are not too badly affected by rising energy prices. The Briton yesterday and today "welcomed" the appointment of Liz Truss and her possible reforms, but, as I said, the "greeting" turned out to be rather sluggish, and the demand for the Briton may begin to decline again in the near future.

General conclusions.

The wave pattern of the pound/dollar instrument suggests a continued decline in demand for the pound. I advise now selling the instrument with targets near the estimated mark of 1.1112, equivalent to 200.0% Fibonacci, for each MACD signal "down," but this mark is quite far away, so the instrument may not reach it. Inside the fifth wave, you need to sell more cautiously since the downward section of the trend can end at any moment.

The picture is similar to the euro/dollar instrument at the higher wave scale. The same ascending wave that does not fit the current wave pattern, the same five waves down after it. Thus, one thing is unambiguous – the downward section of the trend continues its construction and can turn out to be almost any length.