Last week we wrote that the British Pound was showing signs of a double top below 1.6670 but held off on entry as prices tested resistance-turned-support at the upper boundary of a previously broken rising channel. This proved wise, as prices recovered to re-test the swing high once again. Now we see a clear Three Inside Down bearish reversal pattern, hinting that the correction is complete and the down trend is ready to resume in earnest. We will enter short from here, initially targeting 1.4990. Importantly, this will be a “soft” target, meaning we will look for 1.4990 to be the next important juncture but continue to hold short on expectations of a longer-term decline.
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