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 bears applied considerable bearish pressure.
Through the previous two weeks, the GBP/USD pair established a congestion zone between the price levels of 1.6660 and 1.6550.
Bullish breakout off the current steep channel was considered last week. However, extensive bearish pressure was manifested yesterday.
On the other hand, the current DEMAND level to meet the pair is located around 1.6470-1.6460 where a previous bottom was established in March.
As depicted on the chart, bearish breakout off the previous congestion zone 1.6530-1.6595 took place. Shortly after, projection target was reached around 1.6460.
The GBP/USD pair has been downtrending for almost 25 days. However, evident bearish momentum keeps pushing lower without significant bullish correction.
Price action should be watched carefully at retesting the price level of 1.6535. It's the nearest SUPPLY level to meet the pair (a broken DEMAND level). There will be a high tendency to retest it before further movements can occur.
Any bullish fixation above 1.6600 hinders the current steep trend allowing the reversal pattern to hit its projection target at 1.6670, then 1.6720.
The material has been provided by InstaForex Company - www.instaforex.com
