Overview:
On February 5, a temporary bullish breakout above 1.5220 (previous consolidation range) took place. Shortly after, an ascending channel was established at the levels of 1.5170-1.5200. This indicates bullish sentiment on the market.
A projected target for this bullish breakout has been already reached around 1.5550 where the previous daily bottoms were located (solid resistance).
One month ago, the bearish breakdown of the lower limit of the depicted channel occurred enhancing the bearish side of the market and confirming the Flag pattern as bearish.
Significant bearish pressure was applied over the levels of 1.5200 (R2), and 1.4950 (R1 = broken weekly bottom) leading to a quick breakdown.
Bearish persistence below 1.4950-1.5000 indicated a further bearish decline. The initial projection target for this bearish breakout was located at 1.4700.
Fixation above 1.5000 (R1) was needed to extend the pattern's projection target towards 1.5200. However, GBP/USD bulls failed bringing the pair back to the long-term downtrend as depicted on the daily and weekly charts.
Bearish breakdown of the level of 1.4700 enables the pair to resume its bearish scenario towards 1.4500 and 1.4450.
Bullish pullback towards 1.4700 will probably offer a valid SELL entry with S/L as daily closure above 1.4750.
The material has been provided by InstaForex Company - www.instaforex.com
