Breakdown of the DEMAND level around 1.6975 allowed a quick decline of the GBP/USD pair towards the price zone of 1.6800-1.6820.
When retesting the price zone of 1.6800-1.6820, considerable bullish recovery took place. This bullish movement was halted below 1.6880 when the bears applied considerable bearish pressure.
On Wednesday, the GBP/USD pair declined again towards 1.6770. This came after the release of the British manufacturing data, which came below expectations.
In case the bears keep applying bearish pressure, we expect the pair to break down the price level of 1.6760 (the previously broken top established in February 2014 ).
On the other hand, failure of the bears to fixate below 1.6760 will probably allow the bulls to initiate a bullish corrective movement towards 1.6820 and 1.6900 as well.
A pattern of multiple tops was confirmed after breakdown of the depicted bullish channel when the price zone between 1.7140 - 1.7170 provided evident bearish price action.
The price zone of 1.6830 - 1.6800 remains a significant zone as it corresponds to the previous consolidation zone established in June as well as the upper limit of the ongoing bearish channel.
However, 4H fixation below this zone exposed the price levels around 1.6660-1.6680 where the lower limit of the current bearish channel is located.
Note that the GBP/USD pair has been downtrending for almost 20 days without significant correction.
Thus, any bullish fixation above 1.6725 cancels the current steep trend allowing a deeper bullish correction to occur.
