The start of the week is potentially important for GBP/USD from a timing perspective as it marks the 61.8% retracement in time (+/- a day) of the decline from the July 2014 high and this year’s April low. Other time retracements from this move have led to important turns in spot as the highs in June and August came right at key relationships (25% and 50% respectively) so some caution is probably needed here. Unlike in the prior episodes, the pound is actually declining into this window so I am wary of a potential reversal to the upside here. The 1.5240 lower parallel of a pitchfork drawn from the July low through the August/September range is critical in this regard with a move above there needed to signal that some sort of turn higher is indeed underway. A close back under 1.5165 would refocus lower.
Looking to buy GBP/USD on a move through 1.5240 within the next day or so. Stop on a close under 1.5165
Stop profit hit on remainder of short USD/JPY last week.
