Wave counting analysis:
On April 16, the GBP/USD pair lost about 50 bp. Thus, a confident and unambiguous breakthrough of the upper line of the narrowing triangle did not happen and the tool rushed to the lower line to the level of 0.0% Fibonacci. Considering the fact that in every succeeding peak within the triangle turned out to be lower than the previous one, I predict a successful attempt to break through the level of 0.0% for the pair with a further decrease in the instrument as part of building a downward trend segment. Uncertainty on Brexit negatively affected wave counting and market behavior but little by little the market will return to the usual trading and activity. Today, it has already become known that inflation in the UK in March was worse than expected at 1.9%, although it did not slow down. It turns out that the news background supports the option with a decrease to 1.2961 in the pair.
Purchase targets:
1.3350 - 100.0% Fibonacci
1.3454 - 127.2% Fibonacci
Sales targets:
1.2961 - 0.0% Fibonacci
General conclusions and trading recommendations:
The wave pattern still involves the formation of a downward trend and the markets still cannot withdraw the pair from the triangle. Hence, the trades are held with a small amplitude. Accordingly, I recommend expecting the pair to exit from the triangle to determine the market sentiment in the near future. Currently, I expect the fall of the sterling pound to the level of 1.2961.
The material has been provided by InstaForex Company - www.instaforex.com