Breakdown of the DEMAND level around 1.6975 allowed a quick decline of the GBP/USD pair initially towards the price zone of 1.6800-1.6820.
While retesting the price zone of 1.6800-1.6820, a bullish pause occurred meanwhile. This corrective movement was stopped below 1.6880 when the bears applied considerable bearish pressure.
Through the previous two weeks, the GBP/USD pair declined again towards 1.6660 and 1.6550. This came after some negative fundamental data from the UK.
The next DEMAND level to meet the pair is located around 1.6547 where a previous bottom was established in April. However, if the current daily closure persists, there will be high probability of bullish breakout of the current steep channel.
On the other hand, failure of the bears to keep fixating below 1.6660 (the most recent established bottom) will probably allow the bulls to initiate a bullish corrective movement towards 1.6780 and 1.6820.
The price zone of 1.6830 - 1.6800 remains a significant zone as it corresponds to the previous consolidation zone established in June.
However, 4H fixation below this zone exposed the price levels around 1.6600-1.6560 where triple bottom pattern was established.
Note that the GBP/USD pair has been down-trending for almost 20 days without significant correction. However, bullish correction is expected to happen as long as the reversal pattern remains valid.
Thus, any bullish fixation above 1.6600 hinders the current steep trend allowing the reversal pattern to hit its projection target at 1.6650.
The material has been provided by InstaForex Company - www.instaforex.com
