GBP/USD Trading Lower in Channel Down

The GBP/USD has been trending lower since the high made at 1.6744 on June 30th.  The 60 minute chart has alerted a Reversal Channel Down Emerging pattern which has excellent Initial Trend although is weak on Uniformity.  A word about Uniformity:  it’s the measurement of the touchpoints that create the lines of the patterns.  In this case the two downtrend lines are made up of two touchpoints each which have a large spacing in between.  Notice that between 1:00 and 3:00 the highs and low fell short of reaching the trendlines.  What is a positive is that the most recent touchpoints for the downtrend line resistance (green) are close to current price action and strengthen the chance of follow though if prices break through.

The Channel Down is likely to find resistance at the 1.6265 level and this would set up a swing short off the downtrend line (green) however do not neglect the chance of a breakout if that same level is pierced.  All trending patterns have three possible entries, however the last, the breakdown through support is likely to going to be reached since the level is down near 1.6000 and even if 1.6012 (the current level) is broken, a short just above a major “000″ level is not recommended because of the significant support that will be waiting there.