The GBP/USD has been consolidating. The structure of the consolidation is now starting to suggest a bearish continuation outlook. Let’s take a look at the 4H Chart.
GBP/USD rallied from 1.5035 to 1.5270. It then retreated, and the 4H RSI held below 60, showing maintenance of the prevailing bearish momentum. Then, the market rallied again from 1.5055 area but this time it failed to push above 1.52. This was a previous resistance as well.
The overall structure of the consolidation appears to be a head and shoulders, which is a bearish continuation signal within a downtrend. It represents a failed attempt to sustain higher highs. Some call this a clear-out, some call it pump-and-dump. Either way, the hold below 1.52 keeps the bearish continuation outlook in play, and cable looks poised to break 1.5035 towards 1.50, with risk of falling to the 2013-low at 1.4813.
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