where as the downside sees us continuing to create lower lows below 1.48xx, potentially us seeing 1.45 created in the medium term....
the risk reward to me for shorting in the medium term is a 100 pip drawdown if it goes up to retest broken uptrend... vs a potential 600 pip down move to test the low of the bearish channel....
This broken uptrend we have had is the reason why i suspect the 1.54 support that has held GBPUSD up for the last 3 years, may have turned into a resistance. and all we are seeing right now is merely a 150ish pip over flow as we are testing this 1.54 on a monthly.... this thing could very well come down below 1.54 to close the month confirming it as a previously strong support turned Resistance....
soo be cautious.
Tides are changing in my view, and we could see that with the recent dumping of Gold... a trader asked me the other day that if i suspect GBPUSD to go down, it means i am betting in USD strength..... and yes i am... but he also pinpointed that if USD strength should happen then Equities should be in weakness as a matter of correlation...
but what i realized is that the momenum in US equities bullishness is actually slowing down... along with recent Gold Dumping back ot the USD suggests we maybe in for a surprise by the FED, the possibility that the era of free money at incredibly low interest rate may come to an end... and people are dumping gold because it seems that US interest rate has no space for further decrease, and only up it can go...
in my view Gold has the potential to go down to 1200 and this would also bring equities in US down, giving that USD a big boost... the repatriation to US paper notes is not far now...
And just couple minutes ago... US has yet another fall in unemployment claims... meaning the jobs market in US is in recovery.. something the FED is really concerned about since 2008, the jobs market... and the fact that jobs market is in the recovery, puts pressure on the FED to end their QE plans.... the end of QE is near... so dont bet on more of it unless the US economy suddenly turns sour....
We live in a finite world with infinite possibilities.