On October 23, the GBP/USD pair broke initially the 1.6200 level hitting the area of 1.6250. However, most of the bullish gains were lost when the pair established a Double Top reversal pattern around 1.6200-1.6250.
Failure to break down the 1.5900 level was observed two weeks ago. Instead, a bullish rejection led to another bullish swing again toward 1.6200 (127% Fibo Expansion) which was bypassed so far.
As depicted on the chart, price levels around 1.6300 correspond to the multiple previous tops that were established in 2012. Knowing that the high of 2012 year was around 1.6350, the bulls are trying to record new highs before the end of 2013.
The current movement was targeting 1.6350 after the bulls succeeded in defending the newly established demand zone around 1.6200-1.6250. Bypassing the 2012's high around 1.6350, they initated a strong bullish swing toward 1.6450 where a Shooting Star daily candlestick was expressed on Tuesday.
Price area of 1.6440-1.6470 remains a significant supply "resistance" for a bearish entry with SL as daily closure above 1.6500.
Technically, on the 4H chart, the cable showed bearish rejection of 1.6450-1.6400. Successive lower highs are being established with a high probability for a coming bearish impulse to breakdown the lower limit of the ongoint channel depicted on the chart.
Breakdown of 1.6300 is vital for the bears to collect further bearish momentum as the pair has almost reached its daily average range around 1.6315.
Breakdown of 1.6300-1.6385 will enable the pair to reach its next significant demand zone around 1.6225-1.6250.
Today, the Bank of England did not have any surprises. They kept the lending rate at its lowest level of 0.5% witnessed since March 2009 and kept the monetary policy committee of the central bank on its program to buy assets which is the essence of facilitation strategy, to remain at 375 billion pounds (614 billion dollars).
