19.10.202011:16 Forex Analysis & Reviews: GBP/USD analysis for October 19. Briton remains optimistic despite lack of positive results from EU summit

In the most global sense, the construction of a new downward trend section is supposedly continuing. However, every day there is more and more confidence that everything will end with waves a, b and c . If this is true, then the increase in prices will continue with the current levels with the targets located near the wave peak, which is Z . A successful attempt to break through the high of wave b also indirectly states that the markets are ready for new purchases of the instrument. However, as in the case of the EUR/USD instrument, the internal wave structure of the upward wave that began on September 23 looks very unusual.

A closer look shows that the wave counting of the area between September 1 and 23 took a three-wave form and looks quite convincing. An unsuccessful attempt to break through the 61.8% Fibonacci level assures that the downward set of waves is complete. There are already three unsuccessful attempts to break through the 50.0% Fibonacci level speaking in favor of the resumption of the rise in quotations. Thus, above the 50.0% Fibonacci level, the probability of building a new upward wave remains.

On Friday, it became officially known that at the EU summit on a trade agreement with Great Britain, there was no progress noted in the negotiations. The parties to the negotiation process exchanged pleasantries again accusing each other of unwillingness to meet. For the Briton, this information is negative. The instrument continues to trade between 50.0% and 38.2% Fibonacci levels, tending to build an upward wave. However, according to some news background, at any moment the British quotes may go down.

Several reports were released in America on Friday that could have an impact on the instrument. Retail trade in September as it went up to 1.9% compared to August. Industrial production fell 0.6%. The University of Michigan Consumer Confidence Index went up to 81.2. However, the demand for the dollar has not changed due to these statistics. In general, the Briton continues to bargain nervously. Since the end of September, the movement of the instrument takes place mainly between the levels of 1.2830 and 1.3030. This means that the markets cannot unambiguously answer the question of which currency should be bought.

Fed Chairman Jerome Powell will speak in America today. Markets will again scramble for his views on the current state of the economy, which never received a bailout package because Republicans and Democrats failed to agree. In this way, Powell can again urge Congress to agree on an aid package as soon as possible so that the US economy does not start to slow down again.

General conclusions and recommendations:

The Pound-Dollar instrument has supposedly completed the construction of the downtrend. A successful attempt to break the 38.2% level allows us to recommend buying the instrument with targets located around 1.3191 and 1.3480, which corresponds to 23.6% and 0.0% Fibonacci for each new MACD signal "up". However, the current news background for the instrument is such that at any moment it can lead to a strong complication of the current wave counting. While the quotes of the instrument are holding above the level of 50.0%, the variant with the construction of an upward wave remains the main one.