Previously around 61.8% - 50% Fibonacci levels depicted on the chart, a Shooting Star daily candlestick occurred. A valid SELL position was suggested then and it got triggered few days later. The market successfully pushed below 1.6100 shortly after.
Bullish rejection was once expressed when the market pushed below 1.6100 and 1.6060 on September 9. However, another bearish leg dipped further below 1.6060 during the current month.
Bullish recovery was expressed off price levels of 1.5940 and 1.5880. Bullish engulfing daily candlesticks emerging off these levels are depicted on the chart.
On the other hand, the price zone of 1.6100-1.6140 now constitutes a prominent SUPPLY zone where considerable bearish pressure is being applied many times.
Note the Bullish breakout off the depicted bearish channel on the daily chart. However, since then, the pair has been moving sideways within the current congestion zone.
As mentioned before, breakout above price level of 1.6140 is essential to pursue towards further targets initially around 1.6300 . However, the bulls are failing so far. Thus, the pair remains under bearish pressure to revisit 1.5940 ( already visited ) and probably 1.5880 ( significant DEMAND level ).
4H chart reveals long period of downside movement roughly maintained within the limits of the depicted channel.
This week, bulls managed to push beyond the upper limit of the channel.
However, the GBP/USD pair remains trapped between the backside of the channel (1.5950) and price level of 1.6140.
Breakout in either direction is necessary to take a position in the same direction of breakout.
A low risk BUY entry can be taken around 1.5930 with Stop Loss located just below 1.5860. Bullish target is located around the upper limit of the congestion zone around 1.6140.
Another entry can be taken after fixation above 1.6140-1.6180 occurs.
