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 1.5600 was expected to take place shortly after, as suggested in the previous articles.
Our SELL entry which was suggested around 1.5600 got triggered two weeks ago. An early exit should be considered if the current daily candlestick closes above 1.5690 (the upper limit of the consolidation range) .
A better SELL entry with a lower risk/reward ratio may be offered around the price level of 1.5780 if enough bullish pressure is expressed above 1.5690.
Note that fixation below the price zone of 1.5550-1.5500 (mid-line of the consolidation range) is mandatory to pursue towards lower bearish targets at 1.5450 and 1.5350. As, it confirms the Triple-Top reversal pattern depicted on the chart.
On the other hand, daily fixation above 1.5690 (the upper limit of the consolidation range) hinders this bearish scenario for sometime. This probably exposes the breakout projection target at 1.5800 before further bearish decline can be achieved.
The material has been provided by InstaForex Company – www.instaforex.com