A bearish breakout below 1.5550 (WEEKLY SUPPLY) exposed lower targets. Bears have already pushed towards the price levels of 1.5050 and 1.4960 where the market has established another consolidation zone, which extended up to the price levels of 1.5280.
Few weeks ago, the ongoing bearish trend was terminated when the bullish breakout above 1.5200 took place, as depicted on the chart. The GBP/USD pair has been trending upwards within the depicted bullish channel.
Significant bearish pressure was applied around 1.5550 resulting in formation of multiple bearish engulfing daily candlesticks without further retesting of 1.5600.
DEMAND level located around 1.5200-1.5230 was breached last week indicating a strong bearish tendency in the market. It's expected to act as a SUPPLY level for retesting.
GBP/USD bulls failed to defend their DEMAND zone of 1.5170-1.5220, especially after the obvious bearish engulfing candlestick that occurred last Monday.
As expected, a quick bearish decline towards 1.5080 and 1.5040 took place shortly after a bearish breakdown of 1.5170.
Conservative traders should wait for a bullish pullback towards the price zone of 1.5170-1.5200 for a valid SELL entry at retesting. Stop Loss should be located above 1.5230 (previous SUPPLY level).
On the other hand, H4 closure below recent low at 1.5030 directly exposes price levels of 1.4980 and 1.4950.
The material has been provided by InstaForex Company - www.instaforex.com
