Successive bottoms around 1.6465, 1.6555, and 1.6665 (corresponding to the uptrend line) constituted a solid bullish structure that kept pushing higher.
However, during the previous visit in May, the bullish momentum wasn't strong enough to allow the bullish breakout above 1.7000 to pursue towards further targets. Instead, this breakout lost its bullish momentum showing successive lower highs that temporarily managed to breakdown the depicted uptrend line.
This has been taking place until the GBP/USD pair showed bullish recovery around 1.6690 which was followed by strong bullish pressure that pushed above 1.7000 and 1.7150 thus challenging the new price levels that have not been visited since 2008.
Lack of bullish momentum and indecision were observed on the daily chart. This means the pair was trapped within a small congestion zone between 1.7090 and 1.7170.
On the other hand, the most dependable DEMAND level is located around 1.7050 where significant bullish rejection was expressed at retesting that took place yesterday.
Bullish fixation above 1.7000 enhanced the bullish channel scenario, thus enabling the bulls to reach 1.7100 and 1.7160 shortly after.
As expected, the price zone around 1.7140 - 1.7170 keeps providing evident bearish price movement each time a price zone gets tested.
A pattern of multiple-tops was confirmed after breakdown of the depicted bullish channel. Moreover, the first bearish target was hit around 1.7055.
However, the pair showed evident bullish recovery around 1.7060 that was able to challenge 1.7200 once again.
A short position can be triggered if the pair remains outside (below) the depicted channel. Stop Loss should be located above 1.7200.
To avoid possible sudden reversals, bearish targets should be located at 1.7055 and 1.7000 where dependable demand levels are located.
The material has been provided by InstaForex Company - www.instaforex.com
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