justatrader
Short

GBPUSD - Shorts in play but target reduced to 1.536 region

FX:GBPUSD   British Pound/U.S. Dollar
254 0 6
Following up from the previous analysis, price rally in the Cable saw resistance at 1.55 region capping the gains. The right shoulder looks to have formed, but i'd be looking at this H&S pattern with a bit of doubt.

In this aspect, shorts near 1.545 should book partial profits at 1.536 region as things could get a bit tricky here.

1. If 1.536 zone supports the current decline, expect some sideways price action until either resistance or support gives way. A break above 1.55 will see continued gains towards 1.57 (top of the larger triangle pattern ) and higher
2. If support at 1.536 breaks, GBPUSD             could decline to the trendline aka neckline of the H&S

Partial profit booking at 1.536 and remainder moved to break even (or stops trailed to recent high at 1.555 will reduce the risk at the same time allowing for some breathing space for price to chalk out future direction.

Why is the H&S pattern doubtful?: Because weekly candlestick is looking to make a bullish engulfing after last week's small bodied close, indicating potential break to the upside.
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