Previously around 61.8% – 50% Fibonacci levels depicted on the chart, a Shooting Star daily candlestick was expressed. A short position was suggested then and it got triggered few days later. The market successfully pushed below 1.6100 shortly after.
Bullish recovery was expressed off price levels of 1.5940 and 1.5880. Bullish engulfing daily candlesticks emerging off these levels are depicted on the chart.
On the other hand, the price zone of 1.6100-1.6140 constituted a prominent SUPPLY zone. Hence, the pair has been moving sideways with some bearish tendency.
Despite the bullish breakout off the depicted bearish channel on the daily chart, daily fixation above price levels of 1.5870 ( already occurred ) and 1.5945 is still essential to pursue towards further targets initially around 1.6140 and 1.6300.
On the other hand, daily fixation below 1.5870 puts further bearish pressure on the pair to reach 1.5800-1.5780 where bullish recovery should be anticipated ( Note Friday’s daily candlestick ).
4H chart reveals long period of downside movement roughly maintained within the limits of the depicted channel.
Two weeks ago, bulls managed to push beyond the upper limit of the channel. However, the GBP/USD pair was trapped between the backside of the channel (1.5860) and price level of 1.6140.
A low risk BUY entry was suggested around 1.5830-1.5800 with Stop Loss located just below 1.5770. It’s running in profits now. A 123 bullish reversal pattern will be confirmed once the market pushes above 1.5915 which is the recent top established this week.
Bullish fixation above 1.5950 is needed to resume the bullish swing.
Bullish target is located around the upper limit of the congestion zone around 1.6140.
A higher-risk BUY position can also be offered after fixation above 1.5950 occurs with Stop Loss located just below 1.5870.
The material has been provided by InstaForex Company – www.instaforex.com