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Analysis of GBP/USD on January 9. Nonfarm Payrolls disappointed traders and the dollar is declining again.

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For the pound/dollar instrument, the wave markup continues to look quite convincing and acquires a more structured look. In the last few weeks, the instrument has continued to build an upward wave, which is currently interpreted as wave D of the downward trend segment. If this assumption is correct, then the decline in quotes will resume after the completion of this wave, which may happen in the near future, given the size of the corrective wave B, which is visible in the picture below. Thus, the entire downward section of the trend may take on an even more extended form. However, at the moment, the increase in the quotes of the instrument continues, and wave D can take a five-wave form. If this happens, then it will need to be recognized as an impulse, and in this case, it will no longer be able to be a corrective wave D, and the entire wave pattern will require additions. At the moment, there are still three waves visible inside it, which can be the a-b-c series. In this case, an unsuccessful attempt to break the 1.3641 mark, which corresponds to 38.2% Fibonacci, may lead to its completion.

Nonfarm Payrolls are too small for the dollar to start rising.

The exchange rate of the pound/dollar instrument increased by 60 basis points during January 7, and I am surprised that the amplitude of movements was so insignificant. On Friday, the news background was very strong, although nothing was interesting in the UK. Thus, the two key reports of the day are the unemployment rate in the US and the number of new jobs in the US (Nonfarm Payrolls). Strangely enough, with falling unemployment (from 4.2% to 3.9%), the number of Non-Farms turned out to be low – only 199K. The expectations of the markets were twice as high. There were also reports on changes in the number of jobs in the private sector of the economy and the manufacturing sector of the economy. But, as it is not difficult to guess, they also turned out to be worse than expected. The markets considered that the unemployment rate is a less important indicator and reacted only to Non-farms. It is for this reason that the demand for the US currency decreased in the afternoon. And given the weakness of payrolls, I expected a stronger decline in dollar quotes, but the unemployment report cooled the sellers' ardor. I also note that the report on wages in the United States turned out to be better than expected and could also delay part of the negative effect after the release of nonfarm. As a result, the dollar declined and the construction of wave D continued, which should already be completed. On Monday, I expect a new decline in demand for the instrument and a new pullback down.

General conclusions.

The wave pattern of the pound/dollar instrument assumes the completion of the construction of the proposed wave D in the near future. Since this wave has not yet taken a five-wave form, I expect that a new descending wave E will be built. And it should begin in the very near future. Therefore, I advise you to sell the instrument with targets located near the calculated marks of 1.3271 and 1.3043, which corresponds to 61.8% and 76.4% by Fibonacci, if a successful attempt to break through the 1.3456 mark is made. Or an unsuccessful attempt to break through the 1.3641 mark, which corresponds to 38.2% Fibonacci.

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