Gann Topping Pattern in GBP/USD?
The price action in GBP/USD over the past weeks is interesting. The reversal from 1.5500 sets up a potential Gann “Rule of Four” topping pattern that looks quite similar to how the euro peaked out last year on the monthly. There was also some interesting timing near last week’s high as it occurred around the “Sacred Cut” 70.7% retracement of the time elapsed between the July 2014 high and this year’s low. The highs in June and August came at the 25% and 50% time retracements of that same move so there is some nice potential symmetry at work here. The mid-month closing low coincides with the 50% retracement of the April – June advance around 1.5250 so this looks like an important near-term pivot, but traction under 1.5100 is really needed to set off a more impulsive decline. Strength through last week’s highs around 1.5510 would invalidate the potential negative pattern.
I like selling GBP/USD on strength over the next few days against 1.5510.
Stopped out of SPX500 short from 2060 yesterday on close over 2080.
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