A bearish breakout below 1.5550 (WEEKLY SUPPLY) directly 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.
Two weeks ago, the ongoing bearish trend was terminated when bullish breakout above 1.5200 took place, as depicted on the chart. Since then, the GBP/USD pair has been trending upwards within the depicted bullish channel.
Estimated projection targets located around 1.5600-1.5640 have not been reached. Instead, bears put significant pressure around 1.5550 resulting in formation of multiple bearish engulfing daily candlesticks without further retesting of 1.5600.
The nearest DEMAND level located around 1.5200-1.5230 (61.8% Fibonacci level and recent consolidation range high) was breached yesterday indicating a strong bearish tendency of the market.
The bulls failed to defend their DEMAND zone of 1.5170-1.5220 (50% and 61.8% Fibonacci zone) that was being tested yesterday, especially after the obvious bearish engulfing candlestick that occurred on Monday.
Bearish breakdown of 1.5170 indicates a quick bearish decline towards 1.5080 as an initial target.
However, conservative traders should wait for a bullish pullback towards the price zone of 1.5170-1.5200 for a valid SELL entry at retesting.
Stop Loss should be located above 1.5230 (previous SUPPLY level).
The material has been provided by InstaForex Company - www.instaforex.com
