On September 13, the depicted daily downtrend line which came to meet the pair around 1.3025-1.3090 failed to offer enough bearish pressure on the pair. Since then, the GBP/USD pair has been demonstrating a successful bullish breakout so far.
On September 21, the GBP/USD failed to demonstrate sufficient bullish momentum above 1.3296. The short-term outlook turned to become bearish within the depicted H4 bearish channel to test the backside of the broken uptrend.
Bearish persistence below the price level of 1.2970 (50% Fibo level) enhanced further bearish decline towards 1.2790 where the lower limit of the movement channel and 79.8% Fibonacci Level are located.
On H4 chart, the GBP/USD pair looks oversold around the current price levels (1.2700). BUY entries are preferred at the current situation (the lower limit of the depicted H4 channel).
As for the bullish breakout scenario to remain valid, bullish persistence above 1.2790 (the depicted channel upper limit) and an early breakout above 1.3000 (50% Fibo level) are mandatory to maintain sufficient bullish momentum towards 1.3200.
On the other hand, the current bearish persistence below 1.2790 allows a further decline towards 1.2695 and 1.2660. That's why, price action should be watched around the price level of 1.2790 (79.8% Fibo level) for further trading decisions.
The material has been provided by InstaForex Company - www.instaforex.com