GBPUSD - Possible bounce before resuming downtrend (Bear Flag)

FX:GBPUSD   British Pound / U.S. Dollar
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The Cable has been carving out a Bear Flag that began towards the end of last year w/a possible target around the 1.35 area (2009 low) but now it looks like the GBPUSD             pair might be trying to form a possible inverted Head & Shoulders pattern. I believe the ongoing fears of a potential Brexit might keep it from playing out as we move closer to the British referendum on June 23rd. This offers two potential ideas:

1) Possible long between 1.4050 & 1.42 w/a stop-loss just below 1.40 & a target around the 1.4650 area. This area should offer resistance as the 1.46688 level was the high from the bounce of the 1/22 low of 1.40791. This area is also the 1.272 fb             extenstion of the 3/18 high - 3/22 low (1.45145/1.40572) as well as the 38.2 fib level of the 6/18/15 high - 2/29/16 low (1.59301/1.38354).

2) Possible short around the 1.46350 area (based on the resistance levels mentioned above) w/a stop-loss of 1.4750 and a target around the 1.35 area.

Due to the uncertainty of a possible Brexit looming just a few months away, I think that any potential upside for the Cable should be limited. And should an actual Brexit happen, I think the downside risks for the GBP/USD             pair and other GBP crosses could potentially be much greater.

My analysis is for informational purposes only and should not be construed as advice to buy/sell any instruement. Always perform your own due-diligence and never enter into a trade based soley on someone else's opinion/analysis without doing your own.

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