The daily closure below the recent bottoms located around 1.5540-1.5560 rendered the previous consolidation range as a bearish flag pattern with the projection target at 1.5300.
The market has already pushed further below reaching down to 1.5030-1.4980 where the lower limit of the channel has been providing support for the pair over the past few weeks.
The H4 chart shows transition into a sideway movement with mild bearish tendency which has been maintained within the depicted price range.
Temporary bullish breakout took place last week above the upper limit of the short-term channel pattern (the price level of 1.5170).
Persistence above the key-support (the price zone of 1.5170-1.5200) is currently applying bullish pressure over the price zone of 1.5290-1.5360 (prominent Fibonacci levels and the upper limit of the depicted movement channel) where bearish rejection was applied on Friday.
A bearish engulfing daily candlestick was expressed at retesting of the upper limit of the daily channel on Friday. Hence, the GBP/USD pair went back to apply bearish pressure over the previously broken key-zone (1.5170-1.5200) where bullish SUPPORT has been offered since Yesterday.
The GBP/USD is now trapped between 1.5300 ( 50% Fibonacci) and 1.5200 (recent SUPPORT). A breakout in either direction is needed to decide the next destination of the pair.
SELL entries can be taken around the price zone of 1.5300-1.5360 with SL located slightly above 1.5390.
The material has been provided by InstaForex Company – www.instaforex.com