Guest Commentary: GBP/USD is Going to Get really Nasty!
* Cable remains within a downtrend from the 1.6380 high
* Although it is clearly losing momentum it is still matching the first leg down in time and we should still look to scale out of shorts from 1.6160 and 1.5835 in the next 24 hours.
*The reason is that a declining wedge should remain 'nasty' but allow a final spike lower to 1.5485 before an even nastier correction.
Since wedge should comprise 5 overlapping legs each containing three legs themselves this suggests Cable remains within the C leg. Since this also projects an ideal 5=1 target now of 1.5485, the pullback to 1.5690 should prove corrective allowing at least a c=61.85 of A to 1.5520 today to end the C leg. Now this again could prompt a nasty correction the D leg to as high to 1.5735 the 61.8% but also matching the size of the previous correction and the level needed to provide an eventual E=A equality target matching 1.5485.
As such we will look to cut our shorts by 2/3 today at 1.5520 looking probably to resell 1/3 ony at 1.5735 but certainly looking to cover below 1.55 for the eventual correction back to the start of the wedge at 1.5875. A loss of 1.54 would risk opening up the 1.5230 medium-term low.
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