Since July 15, bears initiated the manifested downtrend around 1.7180. This downside movement is maintained within the depicted bearish channel.
Previous weekly bearish gap (about 150 pips) enabled bears to test 1.6058 when significant bullish recovery was manifested.
Bullish engulfing daily candlesticks were expressed during last 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 was enhanced by shooting-star daily candlestick that was expressed when the pair spoke up to 1.6515.
Friday's daily closure within the channel ( below 1.6300 ) further enhanced the bearish scenario towards 1.6140 and probably towards 1.6060.
The GBP/USD pair has been downtrending for almost eight successive weeks. Moreover, evident bearish momentum kept pushing lower until September 9.
Bullish fixation above price level of 1.6150 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 ).
Technically, a valid SELL entry was suggested at retesting of price levels around 1.6410. This position is running in profits now.
Price level 1.6150 should be monitored for price action. 4H fixation below 1.6140 is essential to pursue the current bearish movement. Otherwise, a long-term ascending bottom will probably be established.
However, the bearish scenario is better enhanced by the successive lower highs being expressed on the 4H chart during the past few consolidation days. This applies continuous bearish pressure on the previously mentioned DEMAND level ( 1.6140 ).
The material has been provided by InstaForex Company - www.instaforex.com
