04 January 2016, GBP/USD
GBP/USD is currently trading with bearish bias. During the course of the previous week on Thursday, cable traded short and even closed below the previous lower low. Following this downward movement, we are very reluctant to go long, instead we will remain short with targets below 1.45. Ideally, wave (5) should extent lower.
Traders trading this pair should observe closely other pair such as EUR/USD, GBP/HKD, and AUD/USD . These pairs have a strong positive correlation of up to +0.95 and are thus expected to have a similar chart pattern. Only buy or sell cable if all the other positively correlated pairs are giving the same signal.
As long as the pair trades below the previous lower low formed on Wednesday last week remain short with targets below 1.45