A Shooting Star daily candlestick occurred previously around 61.8% - 50% Fibonacci levels. A valid SELL position was suggested then and it got triggered few days later.
Recently, bullish rejection was expressed when the market pushed below 1.6100 and 1.6060 on September 9. However, another bearish leg was expressed below 1.6060 during the current month.
On the other hand, the price zone of 1.6100-1.6140 constituted a prominent SUPPLY zone where considerable bearish pressure was applied on the pair last week on Thursday.
On Wednesday, bullish recovery was expressed off 1.5880. Bullish engulfing daily candlestick is depicted on the chart. Bullish targets were located around the price zone of 1.6130-1.6180 ( already reached ).
Bullish breakout off the depicted bearish channel is apparent on the daily chart. A bullish corrective move towards 1.6300 may occur as long as the bulls keep moving above the upper limit of the channel.
Breakout above 1.6140 is essential to confirm this suggested position. Otherwise, the pair remains under bearish pressure to revisit 1.5880 at least.
4H chart reveals long period of downside movement roughly maintained within the limits of the depicted channel.
A SELL entry was suggested around the price level of 1.6140 last week. The resulting bearish swing managed to push below 1.5950 (weekly DEMAND level).
This week, bulls managed to push beyond the upper limit of the channel as well as previous broken bottom (probably now acting as resistance).
The GBP/USD pair remains trapped between the backside of the channel (1.6020) and price level of 1.6140.
Breakout in either direction is necessary to take a position in the same direction of breakout.
Until then, risky traders can take a BUY entry around 1.6010-1.6020. Stop Loss should be located below 1.5980.
The material has been provided by InstaForex Company - www.instaforex.com
