On April 9, the bearish trend was resumed towards the level of 1.4550 where a lower daily bottom was reached. This is where the ongoing bullish swing was initiated.
A daily closure above 1.5060 exposed the next resistance levels at 1.5400 and 1.5450 where a temporary bearish pullback took place on April 29.
The next bullish swing extended up to the levels of 1.5750-1.5800, which offered traders few valid sell entries (depicted with red arrows). The final bearish target at 1.5450 was already reached.
Recently, strong bullish pressure was applied against the resistance levels around 1.5800 via the ongoing bullish swing.
That is why, the resistance level at 1.5800 was temporarily breached. Hence, GBP/USD bulls pursued towards 100% Fibonacci Expansion located around 1.5900 where the depicted Head and Shoulders pattern was initiated.
The level of 1.5555 (prominent demand level/depicted uptrend line) got breached earlier last month due to excessive bearish pressure. This enhanced the bearish side of the market towards 1.5360.
However, a bullish pullback towards 1.5550-1.5600 was expected to take place shortly after, as suggested in the previous articles.
Our SELL entry which was suggested around 1.5600 got triggered few days ago. An early exit should be considered if the current daily candlestick maintains its closure above 1.5600.
A better SELL entry with a lower risk/reward ratio may be offered around the price level of 1.5780 (the upper limit of the consolidation range and the backside of the broken uptrend) if enough bullish pressure is expressed.
Note that fixation below the price zone of 1.5550-1.5500 is mandatory to pursue towards lower bearish targets, initially at 1.5450. Moreover, it confirms the Double-Top reversal pattern.
On the other side, risky traders can SELL the GBP/USD pair upon daily closure below Wednesday's low around 1.5525. Initial bearish target would be located at 1.5450.
The material has been provided by InstaForex Company – www.instaforex.com