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 depicted 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 numbers). The final bearish target at 1.5450 was reached.
Recently, strong bullish pressure was applied against the resistance levels around 1.5800 via a recent 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 manifested.
The level of 1.5555 (prominent demand level/depicted uptrend line) got breached last month due to excessive bearish pressure. It enhanced the bearish side of the market towards 1.5360 where the most recent bullish swing was initiated aiming at the level of 1.5800 again.
As anticipated, a daily fixation above 1.5690 (the upper limit of the consolidation range) hindered the bearish scenario for some time exposing a breakout projection target at 1.5800 before further bearish decline can be achieved.
A valid sell entry with a low risk/reward ratio was suggested around the levels of 1.5780-1.5800. It is already running in profits now.
Note that the persistence below the zone of 1.5450 (lower limit of the broken consolidation range) is mandatory to pursue towards lower bearish targets at 1.5400 and 1.5350.
The material has been provided by InstaForex Company – www.instaforex.com