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Analysis of GBP / USD on December 22. EU and UK are still far from signing free trade deal


DATE OF PUBLICATION: 2020-12-22 18:29:29 The part of the trend, which began on September 23, finally took on a five-wave form. Moreover, the view is quite complete. Of course, wave counting may become more complicated, as it has done more than once, nevertheless, at the moment, everything looks like a completed wave structure. If this is true, then the decline in quotations will continue within a new downtrend section with targets located near the 30th figure, and possibly below. Wave 5 in 5 of the uptrend section is clearly visible on the younger chart, which renewed the high of the previous wave 3. Thus thus, the construction of the uptrend can indeed be completed. If this assumption is correct, then the decline in quotations will continue within the expected wave a. Until a successful attempt to break the high of the current wave 5 in 5, the working option would be to build a downtrend. The British are again under pressure from the market due to the lack of progress in trade negotiations between London and Brussels. And at the moment the news background and wave counting coincide. The wave pattern presupposes the construction of a downward trend section, as the uptrend looks complete and the news background suggests a decline in the British, since there have been no reasons and reasons for its rise for a long time. Nevertheless, the Briton has enjoyed a fair amount of demand lately. But what can you do if Britain and the EU are reluctant to make significant concessions to each other for more – for the sake of a trade agreement that will allow them to trade duty-free. After all, the trade turnover between them is almost $ 1 trillion a year. If duties and tariffs start to operate on January 1, it will decrease significantly, which will be a blow to both European and British business. According to the latest information, the UK yesterday proposed to Michel Barnier and the European Union to reduce the volume of fish catch on quotas by 30%. However, the European Union refused, so there is still little chance of reaching an agreement. The parties seem to be moving towards each other, but in terms of time they definitely do not have time. The markets understand this and now they no longer buy the British simply because they are waiting for the conclusion of an agreement. Well, the latest news about a new strain of coronavirus, due to which the UK was quarantined, cannot but affect the exchange rate of the British currency, as this means a new fall in the British economy. Also today in the UK there was a report on GDP, which also turned out to be better than the markets expected. The pound rose slightly in the morning, and the dollar in the afternoon, which received support from its GDP report. Everything is logical. General conclusions and recommendations: The Pound-Dollar instrument has presumably begun to build a new downtrend section. Thus, I currently recommend selling the Pound / Dollar instrument for each MACD downward signal with targets located around 31 and 30 figures within the expected first wave of a new downtrend. A successful attempt to break through the high of wave 5 to 5 will indicate the readiness of traders for new purchases of the Briton and will cancel the option of building a new downtrend section. Material provided by InstaForex – Source – InstaForex


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