The price action is not that clear, we have ascending channel that has been in place for the last few months, false break above the channel top shows weakness, after the sell off it is holding above 1.39, this is the daily support, now it looks pretty indecisive. One possible scenario: if the us dollars stays weak and if the eur/usd moves higher we can very well see the pound do the same. Possible inverse head and shoulder pattern on the intraday charts, right now we have a potential right shoulder forming. The neckline is arround 1.40 and if the 1.38400 could hold this week we could see the pound move higher toward the 1.40 area, we need a close above that region to confirm the breakout. From the neckline to the low is 220 pips so after the break we could see a same meassure objective to the previous high.
Now again we need a close above 1.40 to confirm the breakout and hopefully the pound goes to an extended run this month to the 1.42 zone
Alternatively if the cable breaks down and we see the pound drop below the recent lows ( double blue line on the chart ) levels 1.38400 and 1.38000 that would negate this entire idea and send the pound back to the 1.3740 area
Now again we need a close above 1.40 to confirm the breakout and hopefully the pound goes to an extended run this month to the 1.42 zone
Alternatively if the cable breaks down and we see the pound drop below the recent lows ( double blue line on the chart ) levels 1.38400 and 1.38000 that would negate this entire idea and send the pound back to the 1.3740 area