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GBP/USD - H&S Pattern Signals Bearish Continuation

GBP/USD has been in very choppy waters in the past couple of months. After the latest downswing from 1.4668 to 1.3835, price bounced up sharply. However, the bullish correction stayed clear of the previous price high at 1.4668. After some sideways action, GBP/USD formed a head and shoulders pattern.

GBP/USD Daily Chart 4/6

(click to enlarge) 

When a head and shoulders pattern appears in the middle of a downtrend, which is the case here, the pattern suggests bearish continuation. 
Other technical conditions support this bearish continuation scenario:
1) The moving averages are in bearish alignment; 200-day above 100-day, which is above 50-day SMAs.
2) Price is trading below these SMAs.
3) The pattern of lower highs and lower lows is intact.
4) The RSI held under 60 after tagging below 30, reflecting the maintenance of the prevailing bearish momentum.

This puts the 1.3835 low on the year in sight. We might see a short-term bounce around the psychological level of 1.40. But I would limit the bullish outlook from there to 1.42.