07.10.202014:53 Forex Analysis & Reviews: Analysis of GBP/USD on October 7. Deal between the UK and the EU can be concluded in November

Globally, the formation of a new downward trend section is expected to continue. However, the quotes leaving the lows reached over the past few days suggests that the entire trend section, which began on September 1, has taken on a three-wave form and looks convincingly completed. If this assumption is true, then the current positions may continue to increase quotes within the new upward wave as part of the upward section of the trend, which begins on March 19. In this case, it will take an even more complex and extended form.

If we take a closer look, it can be seen that the wave pattern has indeed taken on a three-wave form. A failed attempt to break through the 61.8% Fibonacci level only further assures me that the downward set of waves is complete. But at the same time, an unsuccessful attempt to break through the 38.2% Fibonacci level suggests the idea of building a new downward wave. Thus, there is also an option in which the downward trend will continue to be formed, and the last three waves will be included in wave 2 or b of this part. In this case, the quotes' decline will resume from the current positions.

In terms of news background, all market attention is still focused on the events related to Brexit. The prospects for a trade deal between Brussels and London remain vague. The negotiations were extended by 1 month and most experts and analysts expect it to fail. And even if it succeeds, it will not save the British economy from another collapse in 2021, when Brexit officially ends. Nevertheless, there are those who believe that the deal is still possible. For example, Goldman Sachs analysts believe that the parties will still be able to sign the most basic version of the agreement by the beginning of November. As a result, they even expect the pound to grow. But so far, it is limited to 30th figures. However, this is not the only thing that affects the pound. There is also a news background from America that is interesting, such as US presidential elections and negotiations regarding the stimulus package.

General conclusions and recommendations:

The pound/dollar pair is assumed to already complete the formation of the downward trend. However, before a successful attempt to break through the 38.2% Fibonacci level, it is not recommended to rush buying the pound. Only if the 30th figure breaks through, I will recommend buying the pair with targets located around 1.3191 and 1.3480, which equates to 23.6% and 0.0% Fibonacci.