On September 21, the GBP/USD failed to demonstrate sufficient bullish momentum above 1.3296. Since then, the short-term outlook turned to become bearish under the depicted daily downtrend.
On H4 chart, the GBP/USD pair looked oversold around the price levels of 1.2700 where profitable BUY entries were suggested.
A Quick bullish movement was demonstrated towards the price level of 1.3170-1.3200 where another descending high around the depicted downtrend was established.
This initiated the current bearish pullback towards the depicted consolidation-zone of (1.2750-1.2880) where the current sideway movement within the depicted H4 channel was initiated.
Recently, the GBP/USD pair failed to establish a successful bullish breakout above the price level of 1.2880 (the upper limit of the current consolidation range). Moreover, a quick bearish decline was demonstrated towards the price zone around 1.2780-1.2800.
The current scenario may pursue a double-bottom reversal pattern or a bearish flag continuation pattern depending on the upcoming price action.
Bullish persistence above the price zone of 1.2870 (neckline of the reversal pattern) is needed to allow another bullish movement to occur towards 1.2980 and probably 1.3100 where the depicted daily downtrend comes to meet the pair.
On the other hand, bearish decline below 1.2750 enhances the bearish flag continuation pattern with initial bearish target around 1.2600.
The material has been provided by InstaForex Company - www.instaforex.com