I’m not sure either, but the catalyst for a topside breakout is clearly there.
We’ve bottomed twice in the 1.4780/00 region and are nearing the top of the recent ranges but need a sustained break of 1.5380 to trigger my favorite pattern, the double-bottom.
As mentioned above, the catalyst is clear: Sentiment toward the pound is rock-bottom and a hung-parliament had been priced into the market. Recent data suggests the UK economy is crawling out of recession while the latest opinion polls show the Tories winning a small but clear majority.
These could combine to give the pound the momentum it needs to break out to the topside. The measured move objective for a topside breakout is toward the 1.59 level.
