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Since July 15, the bears initiated the manifested downtrend around 1.7180. This downside movement is maintained within the depicted bearish channel.
Previous weekly bearish gap (about 150 pips) enabled the bears to test 1.6058 when significant bullish recovery was manifested.
Bullish engulfing daily candlesticks were expressed during last week shooting towards 61.8% Fibonacci level located around 1.6400.
Price level of 1.6400 stands as a prominent daily resistance. This price zone corresponds to 61.8% Fibonacci level as well as the upper limit of the current movement channel.
The bearish scenario was enhanced by shooting-star daily candlestick that was expressed when the pair spoke up to 1.6515.
Friday's daily closure within the channel ( below 1.6300 ) further enhanced the bearish scenario towards 1.6140 and probably towards 1.6060.
The GBP/USD pair has been down-trending for almost eight successive weeks. Moreover, evident bearish momentum kept pushing lower until September 9.
Bullish fixation above price level of 1.6150 and 1.6275 (neckline of the 123 reversal pattern) allowed a bullish corrective move to take place towards 1.6350 and 1.6410 ( 61.8% Fibonacci Levels ).
The updates that Scotland will remain in the United Kingdom allowed the bullish spike towards 1.6515 to take place on Friday. However, immediate bearish rejection was expressed shortly after.
Technically, a valid SELL entry was suggested at retesting of price levels around 1.6410. This position is running in profits now. 4H fixation below 1.6330 is essential to pursue the current bearish movement.
This is enhanced by the successive lower highs being expressed on the 4H chart during the past few consolidation days.
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