After testing price levels around 1.7180 in July, the bears initiated the manifested downtrend which is maintained within the depicted bearish channel.
Despite the weekly closure at 1.6324 (achieved on Friday) , the pair opened with a bearish gap of about 150 pips. This enabled the bears to test 1.6058 shortly after ( on Tuesday ).
Significant bullish recovery was manifested around 1.6070. Bullish engulfing daily candlesticks were expressed during this week shooting towards 61.8% Fibonacci level located around 1.6400.
Price level of 1.6400 stands as a prominent daily resistance. This price zone corresponds to 61.8% Fibonacci level as well as the upper limit of the current movement channel.
The bearish scenario is enhanced by current shooting-star daily candlestick when the pair spoke up to 1.6515 earlier today.
The GBP/USD pair has been down-trending for almost one month. Moreover, evident bearish momentum keeps pushing lower without significant bullish correction.
As expected, bullish fixation above price level of 1.6150 ( Tuesday's highest level ) and 1.6275 (neckline of the 123 reversal pattern) allowed a bullish corrective move to take place towards 1.6350 and 1.6410 ( 61.8% Fibonacci Levels ).
This bullish movement was enhanced by the updates in the independence of Scotland voting, which showed the superiority of the votes that said "no" and therefore Scotland will remain in the United Kingdom.
Technically, a valid SELL entry is suggested at retesting of price levels around 1.6410. 4H fixation below 1.6330 is essential to pursue the current bearish movement.
The material has been provided by InstaForex Company - www.instaforex.com
