The market has previously established a consolidation zone around 1.5000, 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 (weekly supply level) resulting in the formation of multiple bearish engulfing daily candlesticks followed by a steep bearish decline towards 1.4700.
Moreover, demand levels located around 1.5200 and 1.5000 failed to provide enough support for the GBP/USD pair.
Last week, strong bullish rejection was expressed around 1.4700 (weekly low). A significant bullish weekly candlestick was expressed by the end of the week.
As anticipated, the price zone arond 1.4960-1.5000 was expected to provide significant supply for retesting. It corresponds to the upper limit of the long-term depicted channel, 38.2% Fibonacci level and a broken weekly demand established on January 2015.
Note that daily persistence above the price level of 1.5090 (50% Fibo level) indicates a quick bullish spike towards the price level of 1.5380 (projection target).
Recently, GBP/USD bulls failed to defend their demand zone around 1.4960-1.5000, which was breached two weeks ago.
Evident bullish recovery was manifested on the H4 chart near the price levels around 1.4700 (weekly low).
Fixation above 1.4700-1.4720 enhanced a bullish side of the market allowing another bullish swing towards 1.4990 to take place.
Recently, the market has failed to trade above the price level of 1.4970 so far (multiple tops are being expressed around 1.4970-1.5000).
Conservative traders should note that the GBP/USD pair remains trapped between 1.4700 and 1.4970 until a breakout occurs in either direction (transient consolidation range should be expected).
However, a bullish pullback towards the price zone of 1.5080-1.5100 (recent supply zone) may be watched for a quick intraday sell entry. Stop loss should be located above 1.5150.
The material has been provided by InstaForex Company – www.instaforex.com