We finally have the possibility of a short-cover rally in the Pound following an intra-day trend change that occurred overnight after bottoming on crucial support @ 1.21.
One could argue we have formed an inverted head & shoulders pattern on the 1-hour time horizon with price breaking above the neck-line at $1.22.
Additionally, we are above the 50EMA on all intra-day time horizons suggesting that we have a short-term change in trend that may ignite a short-cover rally against the baseline sentiment of a hard Brexit.
The only negative factor against this position is the daily downward sloping trend-line projected from the May 3rd high. However, if we can pullback to the neck-line intra-day and produce a higher low, that may generate enough power to take out this trend-line.
My two upside targets on this trade would be $1.24, followed by $1.27.
A re-test of $1.22 as new support intra-day would give me the signal to go long as this also coincides with a bounce off the 1-hour 50EMA.
Let's see how this plays out...