Recently, the GBPUSD has reached new LOW price levels around 1.1450, slightly below the historical low (1.1650) achieved in September 2016.
That's when the pair looked very OVERSOLD around the price levels of 1.1450 where a double-bottom reversal pattern was recently demonstrated as depicted on the chart.
Technical outlook will probably remain bullish if bullish persistence is maintained above 1.1890-1.1900 (Double-Bottom Neckline) on the H4 Charts.
Bullish breakout above 1.1900 (Latest Descending High) invalidated the bearish scenario temporarily & enabled a quick bullish movement to occur towards 1.2260.
Next bullish targets around 1.2520 and 1.2680 were expected to be addressed if sufficient bullish momentum was maintained.
However, early bearish pressure signs have originated around 1.2470 leading to the previous bearish decline towards 1.2265.
That's why, H4 Candlestick re-closure below 1.2265 was needed to hinder further bullish advancement and enhance the bearish momentum on the short term.
On the other hand, the current bullish persistence above 1.2265 has enhanced another bullish pullback movement up to the price levels of 1.2500-1.2550 where bearish rejection should be expected.
A double-top reversal pattern may be in progress with neckline located around 1.2250. That's why, early bearish breakdown below 1.2250 confirms this reversal pattern in the short-term.
Trade recommendations :
Conservative traders should be looking for signs of bearish rejection during the current bullish pullback towards 1.2550-1.2600 as a valid SELL signal.
T/P level to be located around 1.2100 and 1.2000 while S/L should be placed above 1.2600.
