Since March, the GBPUSD pair has been moving sideways within a wide consolidation range extending between 1.3670 up to 1.4250 which acted as a prominent SUPPLY that prevented further bullish advancement.
On the other hand , the GBPUSD pair has been contained above the demand level of (1.3660) a few times while Bearish breakout below 1.3600 was needed to enhance further bearish decline.
Recently, Failure to maintain bearish pressure below 1.3670 (100% Fibonacci Level) has enhanced another bullish movement for retesting of the price level of 1.3880. Further bullish advancement was to be expected towards 1.4025.
On the other hand, the nearest SUPPLY level is located around 1.4025 where bearish rejection and a valid SELL Entry should be anticipated.
That's why, the pair remained trapped between the mentioned key-levels (1.3800 and 1.4025) until recent temporary bearish breakout occurred last week.
Bearish breakout below 1.3800 enabled temporary bearish decline towards 1.3600 while the price level of 1.3520 was expected to be reached if sufficient bearish pressure was maintained. Unfortunately, this seemed to be a bearish trap.
The recent bullish rejection witnessed around 1.3600 as well as the Current bullish breakout above 1.3800 will indicate this bullish movement to bypass the price level of 1.3880 toward 1.4100.
The material has been provided by InstaForex Company - www.instaforex.com