Overview:
Recently, strong bullish pressure was applied to the resistance level of 1.5800 via the recent bullish swing.
That is why, the resistance level of 1.5800 was temporarily breached. Bulls moved towards 1.5900 where the depicted Head and Shoulders reversal pattern was confirmed.
Later, the support level of 1.5555 got breached by the end of September to excessive bearish pressure, which originated at 1.5800.
The GBP/USD pair moved towards the support zone of 1.5170-1.5150 where a valid intraday buy entry was offered especially after the evident bullish rejection that took place on October 6.
Conservative traders were advised to wait for a bullish pullback towards the level of 1.5480 for a low-risk sell entry.
As anticipated, this price level applied significant bearish rejection to the GBP/USD pair last week. Our suggested SELL entry is already running in profits for today.
Note that bearish persistence below the level of 1.5170 is needed for further bearish decline towards the levels of 1.5000 (prominent weekly support).
A valid SELL entry can be offered around the current price levels (1.5170-1.5200) if enough bearish rejection is expressed by the end of the day.
On the other hand, a price action should be watched around 1.4980 where the lower limit of the depicted movement channel comes to meet the GBP/USD pair. This is where a valid buy entry can be offered. S/L should be located below 1.4900.
The material has been provided by InstaForex Company - www.instaforex.com