Overview:
Strong bullish pressure was applied at the resistance level of 1.5800 via the previous bullish swing.
Hence, 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 due to the 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, which took place on October 6.
Note that bearish persistence below the level of 1.5200 was needed for a further bearish decline towards the level of 1.4950 (prominent weekly support). Instead, a bullish breakout above 1.5200 has been expressed on the previous Tuesday.
Bullish fixation above the price zone of 1.5200-1.5250 allowed a bullish movement towards 1.5330 where the upper limit of the depicted channel put the GBP/USD pair under significant bearish pressure.
This week, bearish persistence below 1.5030 (important key level) is needed to allow bearish decline towards 1.4950 (previous weekly bottom).
On the other hand, a stronger support level is located at 1.4850 (the lower limit of the depicted movement channel). This is where a low-risk buy entry can be offered to conservative traders.
The material has been provided by InstaForex Company - www.instaforex.com