On July 5, a consolidation range bearish breakout was demonstrated below 1.2550 corresponding to the lower limit of the depicted consolidation range.
Moreover, Bearish breakdown below 1.2385 (Broken Key-Support) facilitated further bearish decline towards 1.2320, 1.2210 and 1.2100 which corresponded to significant key-levels on the Weekly chart.
In Early August, another consolidation-range was temporarily established above 1.2100 before August 9 when temporary bearish movement was executed towards 1.2025.
Recent bullish recovery was demonstrated off the recent bottom (1.2025).
This brought the GBP/USD pair back above 1.2100 (Lower limit of the recently established consolidation-zone).
As expected, further bullish advancement was demonstrated towards 1.2230 then 1.2280 where recent bearish rejection was demonstrated.
Bullish persistence above 1.2160 (the recent consolidation range pivot-point) was needed to enhance further bullish advancement towards 1.2320 then 1.2380.
However, recent bearish rejection was demonstrated around 1.2215 (backside of the depicted broken uptrend line).
That's why, another quick bearish decline took place towards 1.2100 then 1.2000 (corresponding to a prominent bottom established on August 9).
Yesterday, early signs of bullish recovery (Bullish Engulfing candlesticks) were manifested around 1.1960 bringing the GBPUSD back above above 1.2100.
As expected, further bullish advancement was demonstrated towards 1.2200. However, the GBPUSD pair looks overbought around the current price levels (1.2200) which constitute a prominent SUPPLY level to be watched for bearish rejection.
Trade Recommendations:
Conservative traders can have a valid SELL entry anywhere around the current price levels 1.2180-1.2200 (upper limit of the recent consolidation range & backside of the depicted broken uptrend).
T/P level to be placed around 1.2100 and 1.2020, while S/L should be placed above 1.2250.
