In the last post, I mentioned that a new low was possible (which we got). The descent has been steady, tripping stops each time traders think a low has been set. Therefore, I will trade a breakout of the descending trendline vs. trying to pick a low. I have lowered my entry order to above Wave-iv of the ending diagonal.
The above chart shows the COT data for the US Dollar index. Notice that commercial traders are holding a net short position equal to the one they held in November 2005 (when the USD topped). This is in the midst of many people calling a new bull market for the dollar. I think this is bearish for the dollar, and supports going long GBP/USD.