The latest recovery is seen as an intermediate one only within a broader downtrend, expected to be resumed shortly GBP/USD daily chart:
Central Scenario: The odds remain in favor of a minimum decline to 1.5054 as long as key-resistance at 1.6301 is not broken decisively
Given the big picture in a weekly or monthly chart, it is still highly likely that the long-term downtrend is at least missing one leg down or that the market is busy forming a broader consolidation triangle which is either about to complete its final E-leg up or still missing another sell-off to 1.4821 (int. 76.4 %) roughly to complete the D-leg down. In every which case we see a very high likelihood that the market will fail to break and stabilize above the 1.6301/38 (76.4 %/daily Ichimoku-lagging) area, while the risk of accelerating down south to 1.5054/25 (Fib.-projection/weekly trend) or to 1.4823 (76.4 %) remains very high. That said and as the market has come fairly close to the next key-resistance at 1.6102 (minor 76.4 %) we now see a fairly good risk-reward given to enter a strategic short-position with a minimum price target of 1.5100.
Down Potential: A minimum decline to 1.5100 with the option to extend to 1.4850.
Risk: The market breaks decisively above 1.6301/38 what would neutralize the prevailing negative bias.
Strategy: Sell 2 units GBP/USD at market, add 2 units at 1.6250, target 1.5100, stop at 1.6500
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J.P.Morgan
Global FX Strategy