The GBP/USD has been consolidating across the 15 and 30 minute charts as the longer term 240 minute and daily charts are in strong mark down cycles. The longer term charts while tempting because of their strong trends are going to take some time to correct enough for me to get interesting in a swing trade short.
In the meanwhile, the 15 and 30 minute charts with their sideways Waves could set up near term momentum breakouts or breakdowns that would reveal short term psychology and maybe even be the first small steps to a larger correction to the upside.
The triangle pattern on the 30 minute chart (above) has the makings of a solid momentum play. I’ll be waiting for the Asian session to see if prices can rally higher through the downtrend line resistance or lower through uptrend line support to trigger a "momo" (momentum) entry. Momentum entries are the only way I will trade a non-trending, accumulation cycle since there is no trend to jump in on. The goal is to wait for a breakout or breakdown preferably through a chart pattern line a triangle or rectangle. I’ll use the MACD Histogram to "filter" the break since I feel this is the best tool for confirming short term momentum shifts. If the pattern does break to the UPSIDE, then I will also begin considering a potential swing short set up on the 240 minute chart:
Here the play would require prices to rally to the 34ema low (the bottom line of my Wave) to trigger a short sell off this resistance. Currently that level is 1.5135. But remember that the Wave is dynamic and this price is likely to change slightly in the near term. Also consider that this would require about a 200 pip correction so this is not a trigger than I expect to be hit soon.