Overview:
On February 5, a transient bullish channel was established between 1.5170-1.5200.
The estimated target for this bullish channel was approached at 1.5550 where the previous daily bottoms were located (solid resistance level).
Then, a bearish breakdown of the lower limit of the channel occurred enhancing the bearish side of the market confirming the Flag pattern as a bearish one.
Persistence below the zone between 1.4950-1.5000 indicated further bearish decline. The initial projection target for this bearish breakout was located at 1.4700. Then, the bearish trend was resumed towards the level of 1.4550 where a lower daily bottom was established.
Last week, evident bullish recovery originated at 1.4560 pushing the GBP/USD pair above the level of 1.4700. Since then, successive higher highs have been established on the H4 chart.
As anticipated, daily closure above 1.5060 (50% Fibonacci level) ended the ongoing bearish momentum. Thus, exposing the next resistance level at 1.5170 (R2) for re-testing.
Recently, the zone between 1.5000-1.5050 turned to be Intraday support when further re-testing takes place.
On the other hand, price action should be watched carefully whithin retesting of the level of 1.5170 (R2) for a possible sell entry.
The material has been provided by InstaForex Company - www.instaforex.com