As depicted on the chart, the GBP/USD pair established a consolidation range above 1.5890 up to 1.6100 for almost 20 days before bearish breakout could take place early in November.
Daily fixation below 1.5870 led bearish pressure to the pair so that it reached the price level of 1.5600 where a new consolidation zone is being established above.
Last week, the GBP/USD pair found intraday DEMAND around 1.5580-1.5550 where many recent lows were previously established back in November.
The DAILY outlook favors the bullish scenario initially towards 1.5800 then 1.6100 provided that bulls keep trading above 1.5720 (which was bypassed earlier today).
On the long term, a triple-bottom reversal pattern may be established above 1.5580. It needs a constant daily fixation above 1.5700 (the upper limit of the current channel).
Another less probable scenario: a bearish flag pattern that waits for a bearish breakout below 1.5550 (similar to what happened back in October).
This scenario is now less probable as long as the daily candlesticks keep closing above 1.5700-1.5720.
The 4H chart reveals the recent consolidation movement maintained within the limits of the depicted channel. Recent bullish breakout took place earlier today.
The price zone of 1.5680-1.5710 is now acting as an intraday DEMAND zone. Bearish pullback towards this zone offers a valid BUY entry with SL as daily closure below 1.5650.
Target levels should be initially located around 1.5820.
The material has been provided by InstaForex Company – www.instaforex.com