We've got major news release all of next week which should determine the fate of this pair.
My guess is a pullback higher into previous structure towards the 61.8% fib retracement before we head south some more.
Hedger have been adding long positions to cover their exposure in anticipation of a move lower, whilst Large Speculators are adding shorts. As of 30/01/16, 66.8% of all Large Speculators are short, not near enough for a long term reversal.
I'm anticipating some correction, a few traps, and a big move down towards 1.4000 at the 161.8% fib extension.
If everyone thinks this is going lower straight away, who's left to buy??
Euro (EUR), 25% weight
British Pound sterling (GBP), 25% weight
Japanese Yen (JPY), 25% weight
Australian Dollar (AUD), 25% weight
The USDOLLAR has an ABCD just shy of reaching D1 targets. There's already signs of bullish rejection at this level. and could mean we're in for some Dollar weakness against the Pound during the first half of this week.
I'm going to be babysitting this pair this week as there's so much high impact news in addition to there being equal chances of a strong rally in either direction. Tuesday will see if the Smart Money has added to their GBP shorts with the CFTC COT report.
BoE data isn't due out until Thursday, with US non-farm's data due Friday, it's going to be a very exciting trading week.