Since May 17, the previous downside movement within the depicted bearish channel came to a pause allowing the recent sideway consolidation range to be established between 1.2750 - 1.2550 with a prominent key-level around 1.2650.
Moreover, signs of bearish rejection have been manifested near 1.2750 (Head & Shoulders reversal pattern with neckline located around 1.2650).
Intermediate-term technical outlook remains under bearish pressure as long as the market keeps moving below 1.2550 (the lower limit of the depicted consolidation range).
In July 18, a recent bullish movement was initiated around 1.2385 (the lower limit of the depicted movement channel).
A bullish pullback was demonstrated towards the backside of the broken consolidation range (1.2550) where another valid SELL entry was offered by the end of last week's consolidations.
Bearish persistence below 1.2460 (38.2% Fibonacci levels) was mandatory to ensure further bearish decline.
However, lack of sufficient bearish momentum was demonstrated around 1.2430 (23.6% Fibonacci Level) allowed the recent bullish pullback to be demonstrated towards 1.2500 (61.8% Fibonacci level) which constituted a prominent Intraday Supply Level where bearish rejection & a valid SELL Entry were suggested Yesterday.
Today, Bearish breakdown & persistence below 1.2430 (38.2% Fibonacci Level) are mandatory to allow further bearish decline towards 1.2350 where the lower limit of the depicted movement channel comes to meet the GBP/USD pair.
Moreover, Bearish breakdown below 1.2350 is needed to facilitate further bearish decline towards 1.2320 and 1.2270 which correspond to significant key-levels on the Weekly chart.
On the other hand, please note that any bullish breakout above 1.2560 invalidates the previously mentioned bearish scenario ( Low probability ).
Trade Recommendations:
Traders who took the initial bearish trade near 1.2500 should lower S/L to 1.2480 to offset the associated risk. Initial T/P levels to be located around 1.2430 and 1.2360.
Intraday traders who missed the initial trade, another SELL entry can be taken upon bearish breakdown below 1.2430 (23.6% Fibonacci Level) with initial bearish target around 1.2350, 1.2320 and 1.2270.
