The previous consolidation movement extended between the price levels of 1.5550 and 1.5770, it represented a period of indecision of the market after such a long bearish rally that started off 1.7100 and 1.6500.
Bearish breakout below 1.5550 directly exposed lower targets. Bears have already reached the price levels of 1.5050 and 1.4960 which have not been visited since July 2013.
As it was suggested in the previous articles, 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).
A bearish breakout scenario, similar to what happened back in October, was successfully executed by the end of December 2014.
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 1.5000.
On January 8, the GBP/USD pair has shown initial bullish recovery off the price level of 1.5050. However, this was followed by a bearish spike reaching the price level of 1.4950 (slightly above the upper limit of the depicted channel).
As anticipated, bullish rejection was expressed around the price level of 1.4950. This enhances the bullish side of the market at least towards 1.5250-1.5300 where we can take low risk SELL entries as mentioned above.
