Many previous lows were established around 1.5550 where the GBP/USD pair found temporary DEMAND in November 2014. A bearish breakout was expressed after many unsuccessful attempts back in 2014.
A bearish breakout scenario similar to what happened back in October was successfully executed shortly after.
The market has already pushed further below the price level of 1.5140 (projection target of the bearish breakout) reaching the lower limit of the depicted bearish channel around 1.5050.
The GBP/USD pair has shown bullish recovery off the price level of 1.5050 which was manifested in the successive bullish hammer daily candlesticks.
The price level of 1.5100 has been defended by bulls since the start of 2015. However, a bearish engulfing daily candlestick was expressed yesterday off 1.5210. This applied extensive bearish pressure on the previous low around 1.5050 invalidating the double-bottom pattern mentioned yesterday.
Consolidation movement range between the price levels of 1.5770 and 1.5550 represented the state of indecision on the market after such a long bearish rally that started off 1.7100 and 1.6500.
As anticipated, the bearish breakout below 1.5550 exposed lower targets directly. Bears have already reached the price levels of 1.5050 and 1.4960 recently.
Conservative traders should wait for a bullish pullback towards the recent SUPPLY zone around 1.5370-1.5450 for a low-risk SELL entry. The stop loss should be located above 1.5500 (upper limit of the channel).
For RISKY traders, a high-risk LONG entry can be taken around the price level of 1.4900 (where the lower limit of the depicted channel is located).
Stop Loss should be set as daily closure below entry levels (1.4900 - 1.4880).
