GBP/USD Is Forming A Flag

GBP/USD has remained at the support trend line of the flag that the pair has been forming since mid-January 2017 ( low 1.19858, 15^th January 2017; high 1,322684, 30^th July 2017) for three weeks.

This figure is an unambiguous signal for a renewal of the drop after the flag finishes forming.

I think that after such a clear figure, especially on the weekly time frame, the renewal of the move to the downside is a matter of time.

It is possible that the figure has not finished forming yet and we could see yet another rally to the resistance trend line around (around 1.3400 – 1.3450) and only then it would begin depreciating again. The second scenario is a rally to the (or below) the local high without it reaching the trend line again. The third scenario is a drop below the current level.

Regardless of whichever of these scenarios becomes a reality, if the pair reaches the limit of the figure it should drop with about 730 pips, which means a test of the historical low at 1.19858.