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.
Recently, H4 chart showed a transition phase into a sideway movement that has been maintained within the depicted price range.
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 retesting the newly-established DAILY SUPPORT around 1.5170-1.5200, which allowed bulls to establish a new ascending bottom (a sign of ongoing bullish momentum).
The persistence of the GBP/USD pair above the recent DAILY support (the price zone of 1.5170-1.5200) applied extensive bullish pressure over the price level of 1.5360 (61.8% Fibonacci level).
This led to an obvious daily breakout above 1.5300 that took place yesterday.
A valid BUY entry could have been taken upon the yesterday’s DAILY closure (above 1.5360). SL should be placed slightly below the recent bottom around 1.5200.
As long as bulls keep defending the recent SUPPORT around 1.5350, they should keep targeting at 1.5460 and 1.5580.
The material has been provided by InstaForex Company – www.instaforex.com