Overview:
The GBP/USD pair has been moving downwards respecting the depicted downtrend line since July 15 when the ongoing downtrend was initiated.
Many bearish impulses were previously initiated around 1.7180, 1.6630, and 1.6400 where the downtrend line came to meet the pair then.
The price zone of 1.6060 - 1.6090 constituted a transient daily support that paused the bearish movement for a few days since September 9. However, bears quickly managed to push below reaching down to 1.5890 (depicted on the chart).
Price level of 1.5890 provided a solid daily support level that provided evident bullish recovery. Thus, bulls have pushed above the downtrend line.
Bullish fixation above 1.6060 was essential to maintain the bullish scenario. However, bears have failed to do so. Instead, the market moved towards the backside of the broken trend line once again.
The 4H chart shows a sideway consolidation range initiated in October. There lower limit of this range is located around 1.5870 where the backside of the broken downtrend line is also located.
Trading recommendations:
Price action should be watched around the current prices (1.5870-1.5890). A valid BUY entry may be offered today if sufficient bullish rejection is expressed. Stop Loss should be set as daily closure below 1.5835.
Bullish fixation above the price level of 1.6025 ( Thursday's highest level ) and 1.6075 confirms this bullish position. The target level would be located around 1.6150 initially.
The material has been provided by InstaForex Company - www.instaforex.com
