Many previous lows were established around 1.5550 where the GBP/USD pair found temporary DEMAND in November 2014. A bearish breakout was expressed after many unsuccessful attempts back in 2014.
A bearish breakout scenario similar to what happened back in October was successfully executed shortly after.
The market has already pushed further below the price level of 1.5140 (projection target of the bearish breakout) reaching the lower limit of the depicted bearish channel around 1.5050.
The GBP/USD pair has shown bullish recovery off the price level of 1.5050 which is manifested in the successive bullish hammer daily candlesticks.
The price level of 1.5100 has been defended by bulls since the start of 2015. A double-bottom reversal pattern is being established above it.
Bullish fixation above the price level of 1.5180 - 1.5230 (neck-line) confirms this pattern and enhances the current corrective movement towards 1.5400.
Consolidation movement range between the price levels of 1.5770 and 1.5550 represented the state of indecision on the market after such a long bearish rally that started off 1.7100 and 1.6500.As anticipated, the bearish breakout below 1.5550 exposed lower targets directly. Bears have already reached the price level of 1.5050 that has not been hit since August 2013.
Conservative traders should wait for a bullish pullback towards the recent SUPPLY zone around 1.5480-1.5550 for a low-risk SELL entry. The stop loss should be located above 1.5560.
For RISKY traders, LONG entries were suggested around the price level of 1.5100. Stop Loss remains below the price level of 1.5075 (Tuesday's and recently Thursday's low). TP should be located at 1.5230, 1.5350 and 1.5400.
The material has been provided by InstaForex Company - www.instaforex.com
