Overview:
The daily closure below the recent bottoms located around 1.5540-1.5560 rendered the previous consolidation range as a bearish flag pattern with the projection target at 1.5300.
The market has already pushed further below reaching down to 1.5030-1.4980 where the lower limit of the channel provided support for the pair few weeks ago.
The H4 chart showed a transition phase into a sideways movement that has been maintained within the depicted price range.
On February 5, initial bullish breakout above 1.5220 took place. Shortly after, a new DAILY support was established around 1.5170-1.5200 (ascending bottoms, a sign of ongoing bullish momentum).
Since then, the GBP/USD pair has been trending upwards. Persistence of the pair above the recent DAILY support (the price zone of 1.5170-1.5200) applied extensive bullish pressure over the price level of 1.5360 (61.8% Fibonacci level on the H4 chart), which did not provide enough RESISTANCE. Now these price levels are acting as SUPPORT.
The long-term projection target for the recent bullish breakout was already reached around 1.5550 where the previous DAILY bottoms were located (DAILY RESISTANCE).
The GBP/USD pair has been moving upwards within the short-term bullish channel depicted on the daily chart until yesterday, when DAILY breakdown of the lower limit of the channel took place, indicating an upcoming bearish swing initially towards 1.5280.
Trading recommendations:
A valid SELL entry could have been taken at retesting of the price level of 1.5550. SL should be located above 1.5600. TP levels to be placed at 1.5480, 1.5360 and finally at 1.5280.
Risky traders can wait for DAILY fixation below 1.5350 to take a short-term SELL entry with TP at 1.5280 and 1.5210.
The material has been provided by InstaForex Company - www.instaforex.com
