The market has previously established a consolidation zone around 1.4960 which extended up to 1.5280. This was followed by a transient uptrend maintained within the depicted channel.
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 and weekly candlesticks.
Significant demand levels located around 1.5200 and 1.5000 were recently breached indicating a strong bearish tendency on the market.
The price zone of 1.4960-1.5000 is expected to provide significant supply at retesting. It comes to meet the upper limit of the long-term depicted channel.
Recently, GBP/USD bulls failed to defend their demand zone around significant bearish pressure of 1.4960-1.5000 was being applied in the market.
As anticipated, H4 persistence below the recent bottom at 1.4900 enhanced further bearish decline towards 1.4800 and 1.4700.
Finally, some bullish recovery is being manifested on the H4 chart after reaching the price levels around 1.4700.
Conservative traders should wait for a bullish pullback towards the price zone of 1.5970-1.5030 (recently established SUPPLY zone) for a low-risk sell entry. Stop loss should be located above 1.5130.
The material has been provided by InstaForex Company – www.instaforex.com