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Overview:
The daily closure below the recent bottoms located around 1.5540-1.5560 rendered the previous consolidation range as a bearish flag pattern with the projection target at 1.5300.
The market has already pushed further below reaching down to 1.5030-1.4980 where the lower limit of the channel provided support for the pair few weeks ago.
The H4 chart showed a transition phase into a sideway movement that has been maintained within the depicted price range.
On February 5, initial bullish breakout above 1.5220 took place. Shortly after, a new DAILY support was established around 1.5170-1.5200 (an ascending bottom, a sign of ongoing bullish momentum).
Since then, the GBP/USD pair has been trending upwards within the depicted H4 channel. Persistence of the pair above the recent DAILY support (the price zone of 1.5170-1.5200) applied extensive bullish pressure over the price level of 1.5360 (61.8% Fibonacci level on the H4 chart) which did not provide enough RESISTANCE.
The long-term projection target for the recent bullish breakout above 1.5220 is located around 1.5500-1.5550 where the previous DAILY bottoms are located (DAILY RESISTANCE).
On the other hand, note that a Head and Shoulders reversal pattern is being expressed on the H4 chart. Any fixation below 1.5330-1.5300 (neckline) invalidates the previously mentioned bullish scenario exposing lower targets around 1.5180 for retesting.
Trading recommendations:
As long as bulls keep defending the recent SUPPORT around 1.5350, they should keep targeting at 1.5460 and 1.5580.
For traders who missed the initial breakout, a valid buy entry can be taken at retesting of 1.5260 with SL located below the recent bottom around 1.5200.
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