18 October 2016, GBP/USD
During the previous trading week, the cable entered into a consolidation only trading within the contracting triangle. Yesterday, the corrective wave D traded long but could not go beyond the upper trend line forming top of the contracting wedge. The current downward rally is the unfolding of the impulsive wave E but with an ideal target along the lower trend line. This view can only be invalidated incase the pair end breaking above the upper trend line. This pair should be traded alongside USD/ZAR and GBP/HKD. These pairs have a strong positive correlation of up to +89% and will have a similar price action during this intraday.
We're short with an ideal target along the lower trend line
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