From 1.5600 to1.6060 the GBP/USD pair is considered as bullish as it is moving within the depicted bullish channel which has been broken through this week.
The GBP/USD pair showed the massive bearish reaction after testing the 1.6060 level and breaking down 1.5880 the prominent support level reaching the point 1.5830 which is a support level on the 4H chart (50% Fibonacci level).
The massive bearish reaction that was able to break down the lower limit of the depicted channel favours the bearish prospective rather than bullish one. However, having failed to break through 1.5830 for two successive times may bring some bullish strength into the market at least towards 1.5900, hence 1.5830 may constitute a valid short-term BUY entry towards 1.5945-1.5970 with SL its breakdown.
Proceeding from the former price action in the current price zone 1.5830-1.6060 we can see that the GBP/USD is probably forming a H&S reversal pattern with neckline at 1.5830 and the right shoulder that is expected to be placed around 1.5945-1.5970 which constitutes a valid low/risk for SELL entry.
Breakdown above the last recorded high at 1.6062 invalidates the bearish scenario for the short-term prospective. However, a breakdown of 1.5830 will confirm the reversal pattern allowing the GBP/USD to reach 1.5777 and 1.5650.
