Overview:
On February 5, a transient bullish channel was established around the levels of 1.5170-1.5200.
The estimated target for this bullish channel was approached at 1.5550 where the previous daily bottoms were located (solid resistance level).
Then, a bearish breakdown of the lower limit of the channel occurred enhancing the bearish side of the market confirming the Flag pattern as a bearish one.
A significant bearish pressure was applied at the levels of 1.5170 (R2), and 1.4990 (R1 = broken weekly bottom) leading to a quick breakdown.
Persistence below the zone between 1.4950-1.5000 indicated a further bearish decline. The initial projection target for this bearish breakout was located at 1.4700 then the bearish trend was resumed towards the level of 1.4550 where a lower daily bottom was established.
Last week, evident bullish recovery originated at 1.4560 pushing the GBP/USD pair above the level of 1.4700 looking for better prices to sell.
As anticipated, the bullish pullback towards 1.5000-1.5050 should be used to sell the pair off (the price zone between R1 and 50% Fibonacci level). T/P levels remain projected at 1.4850, 1.4800, and 1.4720.
On the other hand, a daily candlestick closure above 1.5060 (Intraday Resistance = R2) invalidates this scenario.
Also note that a daily closure above 1.5060 (50% Fibonacci level) is likely to the newly-established uptrend on the H4 channel. Thus, exposing the next resistance level at 1.5170 (R2) for retesting.
