Note the depicted Shooting Star daily candlestick that occurred previously around 61.8% Fibonacci level. Such bearish pressure offered SELL positions a few days later at retesting.
Note that the bullish rejection was initiated when the market pushed below 1.6100 and 1.6060 on September 9. However, another bearish leg was expressed below 1.6060.
On the other hand, the price zone of 1.6100-1.6140 remains a prominent SUPPLY zone where considerable bearish pressure was applied on the pair on Thursday resulting in formation of an Inverted Hammer daily candlestick followed by a long bearish engulfing daily candlestick.
On Wednesday, bullish recovery was expressed off 1.5880. Bullish engulfing daily candlestick is depicted on the chart. Bullish targets are located ain the price zone of 1.6130-1.6180 where price action should be watched for price action.
4H chart reveals long period of downside movement roughly maintained within the limits of the depicted channel.
A SELL entry was suggested around the price level of 1.6140 last week. The resulting bearish swing managed to push below 1.5950 ( weekly DEMAND level ).
This week, the bulls managed to push beyond the upper limit of the channel as well as previous broken bottom ( probably now acting as resistance ).
However, another SELL entry remains suggested around 1.6140-1.6180. Stop Loss should be located above 1.6200.
The material has been provided by InstaForex Company - www.instaforex.com
For detail explanation and best discovery on daily market trends and news you may visit via Intraday technical levels and trading recommendations on GBP/USD for October 21, 2014 . Thanks for your support.
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