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, 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 (the prominent top established on May 6) and 1.7150 thus challenging new price levels that have not been visited since 2008.
Lack of bullish momentum and indecision are now observed on the daily chart.
On the other hand, the most dependable DEMAND level is located around 1.7050 where the previous established top is located.
Bullish fixation above 1.7000 enhanced the bullish channel scenario, thus enabling the bulls to reach 1.7100 and 1.7160 shortly after.
The current price zone between 1.7140 - 1.7160 should be watched for early reversal of bearish price action. A reversal of a double-top pattern is probably being expressed now.
It should constitute a significant SUPPLY zone as it corresponds to the upper limit of the depicted channel and it has been providing resistance so far.
As expected, a short position could have been triggered on Tuesday with stop loss located above 1.7200.
Bearish targets should be located at 1.7055 and 1.7000 where the lower limit of the ongoing channel is located.
The material has been provided by InstaForex Company - www.instaforex.com
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