Dealing with GBPUSD has never been an easy task as this currency is heavily traded by the smartest operators in the world, Bank of England included.
The Pounds dived to almost 1.35USD in Jan 2011 from over 2.11USD in Nov 2007. It barely recovered 50% of that loss (1.70USD)
Since then, it performed an oscillation around the 1.58USD fulcrum. We are still there now, in May 2012.
This time, given the temporary weakness of USD against GBP, Gold, WTI Oil, Euro and Aussie, there might be a chance for the last rally.
SITUATION
See the 4 sideways waves in the monthly chart below. Hence there could be the chance for a short rally of 5 waves up, whereas wave 1 and 2 (in turquoise) have already occured.
The currency touched 4 times the channel in the weekly chart below and it's supposed to breakout on the upside, unless it follows through the support at 1.5770 USD.
This is confirmed by the daily chart below which shows a reversal candlestick (Hammer) right across the 50% support.
The "Hammer" of the daily chart above is confirmed by the "Kicking"reversal pattern of the 4hour chart below. Also, note the completion of the Elliott pattern 5-X-3-X-5 (called 5-3-5 by Elliott) that formed wave 2.
The 1hour chart below shows the breakout of the channel on the upside and the targets of 1.5930 USD and maybe 1.6050 USD
Surprisingly, the 15 min chart below shows that the pair could move slightly down before starting the rally
This is confirmed by the 5min chart below in which the Pound didn't reach the support at 1.5860- 1.58040 USD yet.