The daily chart for the GBP/USD shows a potential head and shoulders reversal pattern.
After falling from 1.6750 in April and the subsequent recovery in late May cable is currently testing the neckline of a head and shoulders chart pattern. Today the neckline comes in at 1.6100. A breach at this level and a measured move from the chart pattern could take the GBP/USD lower to 1.5370. The likeliest target on the charts is the December low at 1.5350.
While this level may seem far off, judging by the fundamentals and the price action over the past two days the move may not seem to unreasonable.
Read more forex trading news on our forex blog.