With my stop hitting on the GBP/USD short it's time to look at the bigger picture. This is one of the more clear and promising structures in many markets right now. There is a classic head and shoulders pattern seen on the 4hr chart above as you can see, as well as a clear 5 wave decline it just completed. Now here's the real test. In order for the decline to remain impulsive, with the trend, it must stay below 1.6744 which is the start of the 5 wave decline and the right shoulder of the head and shoulder pattern. Breaking above 1.6744 would turn the decline into a 3 wave drop and make it a correction, and therefore this pair would rally strongly to new highs on the year. So we can assume that this count is correct and that 1.6744 will hold. We can play the bullish side against 1.5700 if we're aggressive, or we can just wait for signs of a top and short it later on with a stop above 1.6744.
Long term, this pair is bearish, short term though it looks to have higher levels to obtain. 1.6100-1.6200 should be fierce resistance as it's the prior 4th wave area, two fibo retracement levels, and a severe congestion area.
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