Bearish flag on the Pound

The flags, triangles and pennants usually act as continuation patterns and are formed around a consolidation zone. However, we must keep in mind that since the price of the asset consolidates in a congestion area, it may actually break in any direction. On the daily chart of the Pound versus the Dollar we can see that the price has formed a bearish flag around the 1.3500 level. The pattern is called bearish, not because it is going to break to the downside, but because the trend coming into the formation is bearish. None the less, we can see that the pressure is accumulating to the downside and we could see a breakdown of the 1.3500 level. In such case, the GBP/USD may accelerate its bearish momentum and fall to the 1.3200 level. On the other hand, if we see a bullish pullback, the pair may find some resistance at the 200 day EMA (blue line), which is just below the 1.3700 level. If the price manages to break above the 1.3700 level, then its next resistance would be the 55 day EMA along with the 1.3900 level.