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Previously, price zone of 1.6780-1.6800 constituted solid resistance that provided enough supply for two months until bullish breakout took place on May 1.
The recent lows at 1.6465 and 1.6555 (corresponding to the depicted uptrend line) prevented further bearish decline and provided enough buying pressure to keep pushing higher.
The daily chart shows successive bullish breakouts expressed above 1.6850 (the upper limit of a previous congestion zone), then above 1.6930 (the upper limit of the ongoing bullish wedge). The bullish momentum wasn't strong enough to allow the bullish breakout to pursue towards further targets. Instead, this breakout lost its bullish momentum during previous consolidations.
Price levels around 1.6990 provided evident rejection. This paused the ongoing bullish momentum.
The lower limit of the bullish WEDGE was broken down on Friday showing a full-body bearish daily candlestick.
The bears applied significant bearish pressure at retesting of 1.6900 (backside of the broken wedge). This enhanced the bearish pull-back towards 1.6767 as expected.
The GBP/USD showed bullish recovery after testing of 1.6730 leading to daily closure again above 1.6767 enhancing the bullish momentum of the market.
The bulls managed to record a higher value above the recent one at 1.6900. However, the ongoing market demand has been fulfilled around 1.6990 which led to a price decline again.
A bearish impulse took place towards 1.6820-1.6775 thus forming the right shoulder of a possible Head and Shoulders reversal pattern with neckline located around 1.6830-1.6810.
The reversal wedge pattern applied enough bearish pressure to confirm the ongoing reversal pattern which got confirmed by breakdown of price zone of 1.6830-1.6810.
A bullish pull-back is taking place towards neckline of the reversal pattern. The price zone of 1.6830-1.6850 will probably offer a SELL entry with Stop Loss to be located above 1.6880.
Projection targets of this pattern extends down to 1.6775, 1.6720 and 1.6690.
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