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 corrective movement was stopped below 1.6880 when the bears applied considerable bearish pressure.
Last week, 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 keep fixating below the price level of 1.6760 (the previously broken top established in February 2014 ).
This exposed price levels around 1.6620 to be visited shortly after. The next DEMAND level to meet the pair is located around 1.6547 where a previous bottom was established in April.
On the other hand, failure of the bears to fixate below 1.6600 (the lower limit of the ongoing bearish channel) will probably allow the bulls to initiate a bullish corrective movement towards 1.6780 and 1.6820.
The price zone of 1.6830 - 1.6800 remains a significant zone as it corresponds to the previous consolidation zone established in June.
However, 4H fixation below this zone exposed the price levels around 1.6600 where the lower limit of the current bearish channel is located.
Note that the GBP/USD pair has been down-trending for almost 20 days without significant correction.
Thus, any bullish fixation above 1.6680-1.6700 hinders the current steep trend allowing a deeper bullish correction to occur.
