A bearish breakout below 1.5550 exposed lower targets. Bears have already pushed towards the price levels of 1.5050 and 1.4960 where the market has established another consolidation zone, which extended up to the price levels of 1.5280.
This was followed by a transient uptrend maintained within the depicted channel. The bulls managed to push towards higher levels including 1.5550 (just below the weekly supply level).
Significant bearish pressure was applied around 1.5550 resulting in formation of multiple bearish engulfing daily candlesticks reflecting the strong bearish tendency of the market.
Demand level located around 1.5200-1.5230 was breached last week indicating a strong bearish tendency on the market. It is expected to act as a supply level for retesting.
GBP/USD bulls failed to defend their demand zone of 1.5170-1.5220, especially after the obvious bearish engulfing candlestick that occurred last Monday.
Quick bearish decline towards 1.5080 and 1.5000 took place shortly after bearish breakdown of 1.5170 took place.
Conservative traders should wait for a bullish pullback towards the price zone of 1.5170-1.5200 for a low-risk sell entry. Stop loss should be located above 1.5230 (previous supply level).
On the other hand, H4 closure below the prominent DEMAND level at 1.4950 (prominent weekly low) directly exposes the price levels of 1.4850 and 1.4800 (historical low).
The material has been provided by InstaForex Company – www.instaforex.com