The drama of Brexit has reached spiritual levels. Fear on both sides as entrenched perspectives to the point where the real source of danger, the failed structured of the EU, is being ignored. The remain crowd either believes the Euro will not crash, or that the crash can be contained. Neither is a safe assumption.
ALIGNMENT (Price & Volume)
The Pound's composite trend (Up, Up BO, Down) is still consolidation. The primary trend is still down, but that could change too.
The evolution of the trade follows the primary trend. This is the trading/investing discipline of the Matrix. Subscribers never trade against it! With that said, anyone playing the countertrend rally should be watching performance (return) and TIME (cycles). Returns drives across all time frames drives profit taking. The key to making money consistently is trading around a core position using discipline. The daily return (BuS) is blue (see Matrix). Blue is the first warning of extension.
ENERGY (Diffusion Index)
Energy drives the expansion and contraction within the composite trend. Will the energy build that triggered the rally be enough to flip the primary trend? Maybe. All we know today is that the bullish build is dissipating fast towards a bearish setup.
If the pound is going to fall again, it will take time. DI2 is still too high and needs to fall. It will take months for DI2 to fall.
Participation (ProIndex)
The Pound's ProIndex shows professional buying as far back as early 2018. Professional buying and bullish energy builds were warnings that a countertrend rally was coming. We're in it now. Any change in the ProIndex will foreshadow a resumption of the primary downtrend.