Yesterday, the wave structure of the uptrend, which was formed on March 20 and took the shape of a triple zigzag, was subject to some adjustments. A successful attempt to break through the previous high resulted in complication of the internal Z wave structure. Now, within this wave structure, we can still observe the a-b-c waves. Yet, the c wave is transforming into a more complex five-wave structure. If this is true, then the quotes will keep rising for some time within the framework of wave 5 in c in Z. At the same time, the construction of an uptrend is about to complete soon.

A closer look at the current wave pattern shows that the markets made a successful attempt to break through the 161.8% Fibonacci level, as well as through the two local highs. Thus, the price resumed its growth and may now head for the targets located near the 200.0% Fibonacci level. The expected wave 5 in c in Z can complete its formation at any moment. It will depend on how long the markets will ignore the American currency.

There was no important news for the pound/dollar pair on Tuesday. In Brussels, the UK and the EU entered another round of negotiations on trade agreement that will take place when Brexit is completed. However, there are no positive changes so far. The parties said they will "continue to fill the gaps." It is not clear yet whether Michel Barnier and David Frost will be able to cope with this task. There at least four important issues that the parties cannot agree upon. Notably, the agreement must be signed by the end of October so that it could be ratified it by the end of December. Otherwise, from January 1, 2021, London and Brussels will trade with each other on less favorable terms than now. The two parties will need to follow the WTO rules, which imply quotas, tariffs, and other restrictions. Thus, in this case, the economies of the EU and Britain will suffer again due to a decrease in trading volumes.

Today, the UK released the data on the consumer price index for July. Inflation accelerated in July to 1% y/y and to 0.4% m/m. The core consumer price index was also up by 1.8% y/y. So this was good news for the British pound. Later in the day, the US Fed's minutes will be released. They are supposed to give the markets additional information which was not stated during the press conference after the meeting.

Conclusion and recommendations:

The pound/dollar pair has resumed the formation of the upward wave Z. Thus, I would recommend buying the pair now. At the same time, I believe that the entire uptrend is about to complete soon. If this is true, then buying the pair maybe is too risky now. Nevertheless, the instrument may continue to rise with the targets near the 1.3368 mark which corresponds to 200.0% Fibonacci.