On the global scale, the formation of a new structure of the upward trend continues. Its internal wave pattern looks uncertain. However, the trend structure that started on October 23 is unlikely to be part of the downward wave structure that has been forming since September 1. Therefore, this is likely to be a new upward global wave that can consist of three or five sub-waves. This wave can become part of the upward trend as of March 20 or it can be an upward correction wave that is part of the downward structure of the trend that has been forming since September 1.

The wave pattern on the younger time frame looks uncertain and unclear. Given that the quotes have been rising for a short period of time after the completion of wave 2 or b, we can assume that the upward wave will either take a very extended form, or is already completed. Firstly, the pound will be able to rise only if there is a positive information background. Secondly, the current wave pattern is becoming even more complex. An unsuccessful attempt to break through the Fibonacci retracement level 38.2% will be able to preserve the upward market sentiment.

There is still very little positive news for the pound. It became known during the weekend that Michel Barnier and David Frost agreed on another round of trade talks. Reportedly, the parties achieved certain progress. However, this information is not confirmed. At the start of Monday, the British pound was moving in the downward trend. In general, the start of the week was relatively calm for the pound. Thus, it is unclear how the news about the extended trade talks between London and Brussels affected the market. The wave pattern is likely to become more complex today if the Fibonacci retracement level of 38.2% is broken. Nevertheless, the information background for the pound is more negative than for the US dollar. Therefore, I believe that the price has all chances to fall. In such a case, the upward structure of the trend is likely to consist of three sub-waves. After that, the formation of three downward sub-waves will start and the wave structure will look the same as the structure that formed during October 1-23.

On Monday, the macroeconomic calendar will be empty. No important information is set for release either in the United States or Europe. At the same time, several significant reports will come out during the week, including GDP and durable goods orders in the US. However, as for the given instruments, some news about US presidential elections and EU-UK trade talks will bear more meaning as they can drastically change market sentiment and the current wave pattern.

General conclusions and recommendations:

Most likely, the pound/dollar pair has finished the construction of the downward section of the trend. A successful breakout attempt at the Fibonacci retracement level of 38.2% will indicate the unwillingness of market players to buy the British pound. Apart from that, the whole wave pattern may become even more complex and the formation of a new downward wave may start. Thus, if there is a breakout at 1.3013, short positions will be preferable with the targets near 1.2867, that is the 50.0% Fibonacci retracement level, given a possible formation of a new downward wave.