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 weeks ago. Instead, a bullish rejection led to another bullish swing again above 1.6200 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 were trying to record new highs before the end of 2013 and they were successful to hit 1.6464 as a new high for 2013.
Price area of 1.6440-1.6470 remains a significant supply "resistance" for a bearish entry with SL as daily closure above 1.6500. Our initial targets should be set around the mentioned demand zone at 1.6250.
The long-term view remained bullish as long as the bulls are defending the newly established demand zone around 1.6250. That's why, price action should be watched carefully there for a possible early exit signal of our SELL position.
