On September 21, 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.
On H4 chart, the GBP/USD pair looked oversold around the price levels of 1.2700. BUY entries were suggested around the lower limit of the depicted H4 channel (1.2700). Suggested BUY entries are running in profits now.
As for the bullish DAILY breakout scenario to remain valid, quick bullish breakout above 1.3000 (50% Fibo level) was achieved by the end of last week's consolidations.
This enhanced further advancement towards the price level of 1.3170-1.3200 where the depicted downtrend came to meet the GBP/USD pair.
Yesterday, signs of bearish rejection were demonstrated around the price zone of 1.3170-1.3200 (the depicted downtrend). This initiated the current bearish pullback. Initial bearish target was already reached around 1.3000.
Currently, the price zone of (1.2980-1.3025) constitutes a prominent demand zone to be watched for price action for appropriate trading decisions.
On the other hand, bearish breakout below 1.2950 invalidates the bullish scenario, allowing a further decline towards 1.2830 (the next demand zone).
Trade Recommendations:
Conservative traders should consider the current bearish pullback towards the price zone of 1.2980-1.3020 for a low-risk BUY entry.
T/P levels to be located around 1.3130 and 1.3200. S/L should be set as daily candlestick closure below 1.2950.
The material has been provided by InstaForex Company - www.instaforex.com