Since August 9, the GBP/USD pair has been trending-up within the depicted bullish channel except on September 3 when a temporary bearish breakout was demonstrated towards 1.1960.
Around the price level of 1.1960, aggressive signs of bullish recovery (Bullish Engulfing candlesticks) brought the GBPUSD back above 1.2230 where the pair looked overbought.
However, further bullish momentum was demonstrated towards 1.2320 maintaining the bullish movement inside the depicted movement channel.
Moreover, Temporary bullish advancement was demonstrated towards 1.2550 where a reversal wedge pattern was established.
As anticipated, the reversal wedge pattern was confirmed Last week on Monday’s consolidations supported by obvious bearish price action demonstrating a successful bearish closure below 1.2450.
On September 24, the backside of the confirmed reversal wedge was successfully re-tested around 1.2500 where a new episode of bearish rejection was expressed.
The Long-term outlook remains bearish as long as the most recent top established around 1.2500 remains defended by the GBP/USD bears.
Moreover, the recent bullish channel (established on August 9) has been invalidated on September 25. Thus, the short-term outlook turned into bearish as well.
Bearish persistence below 1.2400-1.2440 (Reversal-Pattern Neckline) allowed more bearish decline to occur towards the price levels of 1.2210 where the previous bullish pullback towards 1.2400 was originated on Tuesday.
Today, bearish persistence below 1.2220 is mandatory to allow further bearish decline towards 1.2160 and 1.2120.
Trade Recommendations:
Conservative traders were advised to consider the recent bullish pullback towards the neckline of the confirmed Head & Shoulders reversal pattern (Anywhere around 1.2400-1.2450) as a valid SELL entry. It’s already running in profits.
Remaining T/P levels to be placed around 1.2280, 1.2240 and 1.2160 while S/L should be lowered to 1.2370 to offset the associated risks.
The material has been provided by InstaForex Company – www.instaforex.com
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