It looks like the sterling is coming to the end of a minor degree 5th wave. After two days of sideways trading that eventually formed a perfect contracting triange. The GBP finished the session in what appears to be the iv (circle) leg of minor degree wave 5. So what does this mean. The short trend will continue just a bit longer. My minimum target for this would be below 1.6195, which is the end of iii (circle) and likely maximum target would be at 1.6120 which is the trend line that connects the ends of waves 1 and 3 on the daily chart. I think it is quite possible that iv (circle) could enter in to the price territory of wave ii before completing this short move. If so, then that means it is an ending diagonal formation. A break of 1.6308 before reaching my minimum target would negate this outlook and mean minor degree 5 was already complete. Once price does break 1.6308 the Sterling will be in for a decent retrace of the short move that began on 11/17 at 04:00. I would say at least a 38% retrace but perhaps as far as 66% percent.
I will keep you posted on the retrace as it develops with an eye to picking a good point to get in short.
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