Cable broke down out of the large symmetrical triangle I'd been watching with a convincing clearance. The strength of the subsequent rally surprised me but I'm convinced it's a bear market rally as just the start in a much bigger downside move for the Pound.
My target for GBP/USD from the breakout is 0.3500 lower from the 1.5700 level where the triangle was first pierced. That's gives me a possible downside of around 1.2200 depending on where one measures the width of the triangle.
How far this current rally goes I'm not sure. A 50% rally from the breakout takes us back to 1.5600. A possibility. I'd watch for a break of the flag formation from the 1.4835 as shown on the chart for a sign the rally is over.
Remember I'm not a financial advisor so you should contact a registered one before making any trading decisions. Always trade with stops.
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