The GBP$ has completed a diagonal that ended in a wave 5 diagonal. Price has subsequently broken the wave 5 of C ending diagonal
. The retrace will likely tak price to the underside of the lower trend line
before moving down to the 1.60 to 5900 area.
A conservative trader would enter short in the 1.6400 area on a break below the C wave diagonal lower trend line
with a stop at 1.6605 with a target in the of 1.5908 for a 1:2 risk to reward ratio.