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On August 9, the depicted bullish channel has been established.
Since then, the GBP/USD pair has been trending-up except on September 3 when a temporary bearish breakout was demonstrated towards 1.1960.
Around the price level of 1.1960, aggressive signs of bullish recovery (Bullish Engulfing candlesticks) brought the GBPUSD back inside the depicted movement channel.
Moreover, Temporary bullish advancement was demonstrated towards 1.2550 where a short-term reversal channel was demonstrated.
As anticipated, the reversal channel was broken-down on September 23 supported by obvious bearish price action demonstrating a successful bearish closure below 1.2450.
On September 25, the depicted bullish channel was finally terminated with significant full-body bearish candlesticks which managed to achieve bearish closure below 1.2395.
The Short-term outlook remains bearish as long as the most recent top established around 1.2400 remains defended by the GBP/USD bears.
Bearish persistence below 1.2400-1.2440 (Reversal-Pattern Neckline) allowed more bearish decline to occur towards the price levels of 1.2210 where two recent episodes of bullish pullback towards 1.2400 were originated on October 2 and October 8.
This week, the price zone of 1.2400-1.2415 remains a significant SUPPLY zone to be watched for SELL entries during any bullish pullback including the current one.
Moreover, bearish persistence below 1.2220 is mandatory to allow further bearish decline towards 1.2160 and 1.2120.
On the other hand, If bullish breakout occurs above the price zone of (1.2400-1.2415), further bullish advancement should be expected towards 1.2485 (Low Probability).
Trade Recommendations:
Conservative traders are advised to consider the current bullish pullback towards 1.2400-1.2420 as a valid SELL entry.
T/P levels to be placed around 1.2318 and 1.2240 while S/L should be placed above 1.2450.
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