GBPUSD - A Diamond in the Rough - Delayed Short Possibilities

FX:GBPUSD   British Pound / U.S. Dollar
Greetings Fellow Traders,

For several weeks now I've had limited sight on anything that looked favorable for GBPUSD             . Sells were recommended after a triple top formation at 1.55 (we were awaiting a buy confirmation on the daily close) and then several days later a confirmed break occurred with a retest...but it too fizzled out. For the most part I've stayed away from GBPUSD             since then as it's better to wait until something clean is produced then see something where there is nothing. Just recently I had an epiphany moment with this pair and noticed that I had missed what appears to be a very well defined diamond pattern.

A potential head and shoulders pattern started this diamond pattern(+1 to anyone that can identify the potential H&S I'm referring to), however the neck line was never confirmed broken. Price began trading into what is now clearly 2 large parallel channels. When these channels are shortened you can see the figure that makes up what looks like a diamond, rhombus, etc. These patterns can serve as reversals or continuations. The nature of this pattern is essentially that we are breaking out of a channel as well.

As this chart is massively delayed and we missed the most ideal entry that sits almost 200 pips higher than current market (1.52-1.5250 area), this publication is more of a public service announcement for more structure than I have seen on GBPUSD             in quite some time.

How to trade given where we are in the market? look for a daily close below 1.50300, and a retest of this level, targeting near 1.47/48 and the 2015 yearly lows. Profit should be locked on the first major swing after the retest of the 1.50300. There's no guarantee that price will retest this level, but should it happen we have an entry.

In addition pay attention to the channel resistances that are closest and most relevant to current market prices, I've shortened them in the above chart all you need to do is extend them on yours.

Please do your own analysis before entering a trade. If you like what you see feel free to comment, follow or "like"

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