Source: Forex Analysis
On March 29, the price levels of 1.2980 (the lower limit of the newly-established bearish movement channel) demonstrated significant bullish rejection.
This brought the GBPUSD pair again towards the price zone of (1.3160-1.3180) where the upper limit of the depicted bearish channel was located.
Since then, Short-term outlook has turned into bearish with intermediate-term bearish targets projected towards 1.2900 and 1.2850.
On April 26, a bullish pullback was executed towards the price levels around 1.3035 – 1.3070 (50% – 61.8% Fibonacci levels) where temporary bearish rejection was demonstrated.
Shortly after, a bullish breakout above 1.3075 was temporarily being demonstrated until bearish breakdown below 1.3035 (50% Fibonacci level) was achieved last week.
Hence, a bearish Head and Shoulders pattern was being demonstrated on the H4 chart with neckline located around 1.2985.
As anticipated, The price zone of 1.3030-1.3060 turned to become a prominent supply-zone where a valid bearish entry was offered by the end of last week’s consolidations.
Bearish persistence below 1.2985 (Neckline of the reversal pattern) enhanced further bearish decline.
Initial bearish Targets were already reached around 1.2905-1.2850 (the backside of the broken channel) where another short-term bullish pullback is expected to be initiated towards 1.2985 before further bearish decline can occur.
For those who had a valid SELL entry around the price levels of (1.3035-1.3070). It’s already running in profits. S/L should be lowered to 1.2920 to secure more profits.
Risky traders can look for short-term bullish positions anywhere around 1.2850 with T/P level around 1.2900 and 1.2985. S/L to be located below 1.2800.
The material has been provided by InstaForex Company – www.instaforex.com