Note the depicted Shooting Star daily candlestick that occurred previously around 61.8% Fibonacci level.
Such significant bearish pressure offered SELL positions at retesting that took place a few days later.
Note that the bullish rejection was initiated when the market pushed below 1.6100 and 1.6060 on September 9. Another bearish leg was expressed below 1.6060 (The weekly low is located around 1.5950).
On the other hand, the price zone of 1.6100-1.6140 remains a prominent SUPPLY zone to meet the pair. It applied a considerable bearish pressure on the pair on Thursday resulting in formation of an Inverted Hammer daily candlestick.
4H chart reveals long period of downside movement roughly maintained within the limits of the depicted channel.
Although the recent bullish leg which extended between 1.6060 (the lower limit of the channel) and price levels around 1.6400 looked strong compared to the recent bearish swings, the bears managed to break below 1.6060 on Friday.
This bearish swing was targeting at 1.5900 (site of prominent monthly bottoms). However, the bears just reached 1.5950 when obvious bullish rejection was expressed to push again towards 1.6150.
For risky traders, a valid SELL entry can be taken around the current prices but with a higher risk. Stop loss can be placed above 1.6240.
According to the price action expressed at retesting of price zone of 1.6100-1.6140, the GBP/USD pair is now targeting at 1.5960 and 1.5860 where prominent bottoms were established.
The material has been provided by InstaForex Company - www.instaforex.com
