A bearish breakout below 1.5550 (WEEKLY SUPPLY) directly 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 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 of the market. It's now expected to act as a SUPPLY level at retesting.
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, bearish breakdown of 1.5170 allowed a quick bearish decline towards 1.5080 and 1.5040 to take place shortly after.
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).
The material has been provided by InstaForex Company - www.instaforex.com
