Overview:
On March 2, a bearish breakdown of the lower limit of the previous daily channel occurred enhancing the bearish side of the market.
Persistence below the zone of 1.4950-1.5000 indicated a further bearish decline towards 1.4700.
Shortly after, the bearish trend was resumed towards the level of 1.4550 where a lower daily bottom was established.
Evident bullish recovery emerged at 1.4560 pushing the GBP/USD pair above the level of 1.4700, then successive higher highs were established.
As anticipated, the daily closure above 1.5060 exposed the next resistance levels at 1.5400 and 1.5450 where extensive bearish pressure was previously applied.
This enhanced the bearish side of the market towards the levels of 1.5300, 1.5250, and 1.5100 where the most recent bullish swing was initiated on May 5.
On the other hand, the price zone of 1.5750-1.5800 (critical resistance zone) offered a valid sell entry almost three weeks ago. Final bearish target at 1.5450 was already reached.
Moreover, the lower high established at 1.5660 applied significant bearish pressure. That is why, the support zone of 1.5500 to 1.5450 failed to stop this bearish momentum leading to its breakdown.
It should be acting as an intraday resistance when further retesting takes place. A low-risk SELL entry can be offered at retesting.
The price levels of 1.5150 and 1.5100 are now fully exposed to be reached quickly, provided that the current daily candlestick doesn't come as a bullish engulfing one by the end of the day.
Conservative traders can wait for a bearish pullback towards 1.5080-1.5100 for a low risk BUY entries. SL should be set as daily closure below 1.5080.
The material has been provided by InstaForex Company - www.instaforex.com