GBP/USD had been trapped inside a wide-ranged price zone extending between 1.5900 and 1.6250 until November 27 when a bullish breakout took place.
Since then, the bulls have been defending 1.6250 as a prominent support. Another successful bullish retesting took place in the mid-December that pushed the pair again to the upside.
Based on this bullish breakout, the GBP/USD pair had a projection target around 1.6630 which acted as a prominent resistance for the pair.
As suggested, the bearish reversal was expressed at retesting of 1.6660 on January 24.
As depicted on the 4H chart, four-hour stabilization below the price zone of 1.6440-1.6490 was mandatory for further decline to take place. Quick decline took place towards 1.6310 shortly after.
The price zone of 1.6310-1.6330 represents a confluence of support for the GBP/USD pair. A valid buy entry can be taken here with stop loss as four-hour closure below 1.6275.
The material has been provided by InstaForex Company - www.instaforex.com
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