Overview:
On July 15, an extensive bearish impulse was initiated. Since then, the GBP/USD pair has been moving downwards below the depicted downtrend line.
Many bearish impulses were previously initiated around 1.7180, 1.6630 and 1.6400 where the downtrend line came to meet the pair then.
The price zone of 1.6140 - 1.6100 constituted a weekly support that paused the bearish movement on September 9. However, the bears quickly managed to push below the price level of 1.6060.
A new bearish impulse was applied after retracement towards the price zone of 1.6350-1.6400 took place.
As suggested, price level of 1.5890 provided evident bullish recovery. A bullish engulfing daily candlestick emerged.
This week, the bulls are pushing towards the downtrend line (price zone of 1.6090-1.6110) where another bearish swing is anticipated to be initiated.
On the other hand, bullish breakout above 1.6120 will liberate a strong bullish swing towards 1.6250 initially.
Trading recommendations:
Risky traders can short the pair around the current levels. SL should be set as 4H closure above 1.6125. Initial target is located at 1.5890 where further price action should be watched.
Conservative traders should wait for bullish breakout above 1.6090-1.6110 ( the depicted trend line ). It indicates a valid BUY entry towards 1.6250.
