GBP/USD: Trend Down?
Back in Dec 2016 I wrote of two things that would stop the decline further to what seemed at the time to be a huge Bearish Halfway Hesitation with a target at 'X' on the Monthly Chart above (just over 1.0500). They were '...1st is the Centre Tine of the Bearish Schiff Pitchfork of the same 2007 - 2009 move (currently 1.2267), this drops about 45 tics a month...and is a halting pattern as it is a Bearish Pitchfork. The 2nd is the breached but likely still valid support from the 2016 low at 1.1444 up to the May 1985 low at 1.1870. Neither seems that particularly strong but they are still there.'. Both turned out valid this past year as we never had two consecutive closes below the Middle Tine (currently 1.1692) nor had we any attempts at 1.1870 or 1.1444.
This has seen resurgence this past year with an attempt and so far failure to overcome the nearby 61.8% Fib at 1.3637, the first real resistance after the 1 and 2 Year MAs (1.3018 and 1.3231 respectively). We have a nice short term Uptrend (currently 1.3213) and a turn up in the 1 Year MA (currently 1.3018). However, though the HH target at just over 1.0500 is a long way away, the chances for Neutral (never mind Bullish) are also distant. The first real test after the 61.8% Fib is the main 50% Fib of the nearby move at 1.4315. That'll be a big nut to crack should prices try higher...but that's not the half of it. The main stuff is currently between 1.4767 - 1.5156 consisting of the 5 Year MA (currently 1.4767), the nearby 38.2% Fib at 1.4992 and then the combo of the Downtrend/Upper Tine Schiff Pitchfork currently 1.5138 plus the 38.2% Fib of the 2007 - 2016 move at 1.5156.
These are a long way away on the upside and this is before going into Neutral once over the key 50% Fib at 1.6303. As a tempering final Bullish point, this past Month has seen a Bullish Dragonfly Doji on the Monthly Chart...though I would caution on pressure from 1.3637. Should we see consecutive closes below the recent Uptrend then it may mean 'X' is back in play...or at least the support at 1.1870 and 1.1444 and possibly the Middle Tine. At the moment three out of four MAs are pointing down so the bullet point above is mildly Bearish.
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