The GBP/USD pair has been moving downwards respecting the depicted downtrend line since July 15 when the ongoing downtrend was initiated. Many bearish impulses were previously initiated around 1.7180, 1.6630, and 1.6400 where the downtrend line came to meet the pair then.
The price zone of 1.5890-1.5870 constituted a transient daily support that paused the bearish movement for a few days. However, bears quickly managed to push lower.
Bullish fixation above 1.6060 was essential to maintain the bullish scenario. However, bears have failed to do so. Instead, the market moved towards the backside of the broken trend line around price level of 1.5730 once again.
The 4H chart now shows a wide bearish channel that was initiated in October. There lower limit of which was located around 1.5800-1.5790 at the last time of retesting that took place on Friday.
The GBP/USD pair looked quite oversold on the 4H chart. Bullish correction was anticipated despite the bearish outlook on the daily chart.
Bullish fixation above price zone of 1.5730 ( back inside the depicted channel ) is mandatory to initiate a corrective bullish movement.
Bullish fixation above the price zone of 1.5730 ( lower limit of the channel ) indicates a bullish corrective movement.
If so, the bullish target level would be initially located around 1.5850 and 1.5880.
The material has been provided by InstaForex Company – www.instaforex.com