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 provided support for the pair few weeks ago.
The H4 chart showed a transition phase into a sideway movement that has been maintained within the depicted price range.
On February 5, initial bullish breakout above 1.5220 took place. Shortly after, a new DAILY support was established around 1.5170-1.5200 (an ascending bottom, a sign of ongoing bullish momentum).
Since then, the GBP/USD pair has been trending upwards within the depicted H4 channel. Persistence of the 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 on the H4 chart) which did not provide enough RESISTANCE.
The long-term projection target for the recent bullish breakout above 1.5220 is located around 1.5500-1.5550 where the previous DAILY bottoms are located (DAILY RESISTANCE).
On the other hand, note that any fixation below 1.5330-1.5300 (level of multiple bottoms) invalidates the previously mentioned bullish scenario exposing lower targets around 1.5180 for retesting.
As long as bulls keep defending the recent SUPPORT around 1.5350, they should keep targeting at 1.5460 and 1.5580.
For traders who missed the initial breakout a valid buy entry can be taken at retesting of 1.5260 with SL located below the recent bottom around 1.5200.
The material has been provided by InstaForex Company – www.instaforex.com