Daily Forex Update: GBP/USD

The uptrend on the 60-minute chart of the GBP/USD has lost bullish momentum over the past 35 candles; subsequently, what was initially a correction to Channel Up support has, in my opinion, now transitioned to a pattern reversal. The question now is: what is the likelihood for follow-through considering the weaker U.S. Dollar and Friday’s U.K. Revised Gross Domestic Product (GDP) release?

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 To me, the uptrend line breakdown down signals a bearish shift. However, with the near-term low at 1.5505 being so close to the reversal, I feel it’s prudent to wait for a continued show of weakness—especially through the support of the “big figure” at 1.5500.

The two-bar Initial Trend reading sets up an Autochartist Initial Movement/Momentum (AIM) short entry as long as the momentum lower is adequate (to be confirmed by a Breakout reading of six bars or more) and the breakdown is accompanied by a negative MACD Histogram reading.

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