The market has previously established a consolidation zone around 1.5000, which extended up to 1.5280. This was followed by a transient uptrend maintained within the depicted channel.
Bulls managed to push the price towards higher levels including 1.5550 (just below the weekly supply level) where significant bearish pressure was applied, resulting in the formation of multiple bearish engulfing daily candlesticks.
Then, strong bullish rejection was expressed around 1.4700 (weekly low). A significant bullish weekly candlestick was expressed by the end of the week.
As expected, the price zone around 1.4960-1.5000 provided evident supply at retesting that took place yesterday. This price zone corresponds to 38.2% Fibonacci level as well as a previous broken weekly demand, which goes back to January 2015.
Transient sideways movement with slight bearish tendency is still being expressed on the daily chart. This was quickly followed by yesterday's daily Shooting-Star candlestick at the levels of 1.5000.
Note that daily persistence above the price level of 1.5090 (50% Fibonacci level) is needed to confirm the 123 bullish reversal pattern ( as well as the recent ascending bottom).
Previous demand zone around 1.4960-1.5000 was breached three weeks ago resulting in quick bearish decline towards 1.4700.
Evident bullish recovery was manifested on the H4 chart near the price level at 1.4700 (weekly low).
As mentioned before, fixation above 1.4700-1.4720 enhances further bullish visits towards 1.5000.
Recently, the GBP/USD pair failed to trade above the level of 1.4970 as a flag pattern has been expressed since the levels of 1.4970-1.5000 were initially visited.
Conservative traders should note that the GBP/USD pair remains trapped between 1.4700 and 1.4970 until a breakout occurs in either direction (bullish breakout would be less risky).
A daily breakout above the level of 1.5090 (50% Fibonacci level) is needed to confirm the 123 bullish reversal pattern as well as the depicted Flag pattern.
Estimated bullish targets would be projected towards 1.5150 then 1.5350.
The material has been provided by InstaForex Company - www.instaforex.com
