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The market has previously established a consolidation zone around 1.5000, which extended up to 1.5280. This was followed by a transient uptrend maintained within the depicted channel.
Bulls managed to push towards higher levels, including 1.5550 (just below the weekly supply level).
Significant bearish pressure was applied around 1.5550 resulting in the formation of multiple bearish engulfing daily candlesticks.
Demand levels located around 1.5200 and 1.5000 failed to provide enough support for the GBP/USD pair. This was followed by bearish decline towards 1.4700.
Last week, strong bullish rejection was expressed around 1.4700 (weekly low). A significant bullish weekly candlestick was expressed by the end of the week.
The price zone around 1.4960-1.5000 was expected to provide supply at retesting as it corresponds to the upper limit of the long-term depicted channel, 38.2% Fibonacci level and a broken weekly demand, which goes back to January 2015.
Transient sideway movement with slight bearish tendency is being expressed on the daily chart. Note that daily persistence above the price level of 1.5090 (50% Fibo level) confirms the bullish flag pattern. Estimated targets are projected towards 1.5150 then 1.5380.
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Recently, GBP/USD bulls failed to defend their demand zone around 1.4960-1.5000, which was breached two weeks ago.
Evident bullish recovery was manifested on the H4 chart near the price levels at 1.4700 (weekly low).
Fixation above 1.4700-1.4720 enhanced a bullish side of the market allowing another bullish swing towards 1.4990 to take place.
Recently, the GBP/USD pair failed to trade above the price level of 1.4970 as a flag pattern has been expressed since the price levels of 1.4970-1.5000 were visited.
Conservative traders should note that the GBP/USD pair remains trapped between 1.4700 and 1.4970 until a breakout occurs in either direction (the current consolidation range was anticipated in the previous articles).
However, a quick bearish pullback towards the price level of 1.4720 (daily demand level) may be considered for a counter-trend buy entry. Stop loss should be located below 1.4625.
Performed by Michael Becker, Analytical expert
InstaForex Group © 2007-2015
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