On May 15, the GBP/USD pair managed to break down the lower limit of the bullish BLUE channel depicted on the chart. Since then, the pair has been moving within the triangle pattern after having a quick bearish swing between 1.6300 and 1.5260.
Last week, the GBP/USD pair has found significant support at the lower limit of the triangle pattern around 1.5460 which pushed the pair to the upside for about 260 pips in one day.
Price level 1.5720, which corresponds to the upper limit of the symmetrical triangle, constituted an Intraday Resistance for the pair on the short-term. However, breakthrough above it opened the way towards the stronger resistance zone 1.5773-1.5840.
The GBP/USD pair has a strong long-term Resistance zone between 1.5773-1.5840 where daily price action should be watched for valid long-term positions to be taken.
Yesterday, the GBP/USD pair was testing the backside of the broken limit of the triangle and the broken resistance level of 1.5720.
Price zone between 1.5773-1.5840 constitutes a supply zone which is expected to bring some bearish retracement towards 1.5600 before further movements can take place.
Bearish retracement is expected especially after this quick bullish movement. This bearish retracement is confirmed with 4H closure inside the triangle again (below level 1.5667) which confirms the reversal Head & Shoulders pattern depicted on the chart.
