British Pound Technical Outlook

I want to stay focused on the big picture because it is possible that the GBPUSD is at a significant turning point. Remember, the entire decline from 2.1160 is most likely unfolding as an impulse (5 waves) and just 3 waves have unfolded. The rally from 1.3500, although strong, still counts well as a correction (3 waves). In fact, price reached and reversed at a former 4th wave (common guideline). The rally from 1.5800 was an impulse, making it possible that wave v of C was truncated. Staying below 1.6626 keeps the topping scenario intact. I wrote yesterday that “there is the risk of a rally through 1.6510 before the larger trend turns down for good. Such a scenario would prevent a low risk short opportunity.” The GBPUSD reached 1.6470 today before turning down in impulsive fashion. Favor the downside.