Although the GBP/USD pair has reached a major support line during last week (backside of broken long-term downtrend), the pair failed to consolidate below it due to lack of bearish power and the pair quickly went back to retest a previously mentioned resistance at 1.5750 and 1.5830.
It was mentioned that it would be ok to open short trading positions if the price firmly consolidates below this major resistance which already happened.
It is important to note that the pair has already broken down a long-term uptrend line that came to meet the pair around 1.6000.
Last week price level 1.5830 was recommended as a valid SELL entry with SL above 1.5895 which got activated shortly after. This week we need to have consolidation below of the weekly low 1.5673. Otherwise, consolidation again above 1.5750 might hinder the bearish scenario opening the way directly towards 1.5830 again. Theoretically speaking, the pair has confirmed a giant "double-top" pattern to be targeting 1.5350 as long as the pair is consolidating below neck-line around 1.5830 - 1.5890. It is important to note that price level 1.5550 should be watched for price action as cable may find quite strong support there.
The material has been provided by InstaForex Company - www.instaforex.com
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