On December 12, the previously-dominating bearish momentum came to an end when the GBP/USD pair visited the price levels of 1.2500 where the backside of the broken daily uptrend was located.
Since then, the current bullish swing has been taking place until January 28 when the GBP/USD pair was almost approaching the supply level of 1.3240.
That's when the current bearish pullback was initiated around slightly lower price levels near 1.3215 (around the depicted supply levels in RED).
This was followed by a bearish engulfing daily candlestick on January 29. Thus, the GBP/USD pair lost its bullish breakout above 1.3155. Hence, an intraday supply level was recently established around 1.3155.
As expected, the recent bearish decline below 1.3150 brought the GBP/USD pair into a deeper bearish correction towards 1.3000 where bullish recovery should be anticipated.
On the other hand, for the bullish scenario to regain its validity, bullish persistence above the price level of 1.3150 (Recent Supply Level) should be re-established on a daily basis. This would enhance another bullish visit towards 1.3240.
Risky traders have been suggested a counter-trend short trade around 1.3150. Final T/P level around 1.3000 was already reached.
On the other hand, conservative traders should consider the current bearish pullback towards 1.3000-1.2970 (backside of the broken downtrend in RED) for a valid BUY entry.
T/P levels to be located around 1.3055, 1.3155 and 1.3200. Any bearish H4 closure below 1.2950 invalidates this scenario.
The material has been provided by InstaForex Company - www.instaforex.com