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 17 when significant bearish rejection was demonstrated around 1.2999 (Bearish Engulfing candlestick around the downtrend line).
This paused the bullish scenario for a while, allowing sometime for bearish correction towards 1.2830 where another bullish swing was initiated. The GBP/USD pair is currently approaching the price level of 1.3070.
For the bullish scenario to remain valid, bullish persistence above the price level of 1.3000 (The previous Weekly High) should be maintained on a daily basis.
Bullish persistence above 1.3000 allowed further bullish advancement to take place towards 1.3135 (Depicted Supply level) where recent bearish rejection is being demonstrated.
Any bearish pullback towards the price level of 1.3000 (previous weekly high) should be considered for a valid BUY signal.
On the other hand, any bearish decline below 1.3000 may bring the GBP/USD pair again into a deeper bearish correction that may extend down towards 1.2800 (Nearest Demand Level).
Trade Recommendations:
Conservative traders can wait for bearish pullback towards 1.3000 (backside of the broken downtrend in RED) for a valid BUY entry.
T/P levels to be located around 1.3055, 1.3135 and 1.3200. Any bearish H4 closure below 1.2950 invalidates this scenario.
The material has been provided by InstaForex Company -
www.instaforex.com