A bearish breakout below 1.5550 directly exposed lower targets. Bears have already pushed towards the price levels of 1.5050 and 1.4960, which have not been visited since July 2013.
Around the price levels of 1.5050 and 1.4960 the market has established another consolidation zone, which extended up to the price levels of 1.5280.
Two weeks ago, the ongoing bearish trend was terminated when bullish breakout above 1.5200 took place, as depicted on the chart. Since then, the GBP/USD pair has been trending upwards within the depicted bullish channel.
Estimated projection targets are located around 1.5600-1.5640 where the previous consolidation zone was located. However, earlier, bears had put significant pressure around 1.5550 resulting in the formation of multiple bearish engulfing daily candlesticks without further retesting of 1.5600.
Two weeks ago, the GBP/USD pair consolidated above the price zone of 1.5360 (61.8% Fibonacci level), which failed to provide enough RESISTANCE over the last bullish swing.
For the current bullish breakout to persist, bulls should keep defending the price zone of 1.5300-1.5330 that is likely to be tested today.
Estimated projection targets for the recent bullish breakout are roughly located around 1.5600-1.5640, which have not been tested yet. Moreover, a recent Head and Shoulders pattern is being established as depicted on the chart.
On the other hand, the price action should be seen around the price zone of 1.5350-1.5300 ( Intraday DEMAND level ) to determine the next destination of the GBP/USD pair.
Bearish breakdown of 1.5300 should not be excluded, especially after the obvious bearish engulfing candlestick that occurred on Monday. If so, a quick bearish decline towards 1.5200 would be expected.
The material has been provided by InstaForex Company - www.instaforex.com
