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 depicted downtrend line in RED).
This paused the bullish scenario for a while, allowing sometime for bearish correction towards 1.2830 where another bullish swing was initiated.
On Friday, the GBP/USD pair was almost approaching the supply level of 1.3240 when the current bearish pullback was initiated around 1.3215.
For the bullish scenario to remain valid, bullish persistence above the price level of 1.3150 (Broken Supply Level) should be maintained on a daily basis. This enhances another bullish visit towards 1.3240.
On the other hand, any decline below 1.3150 will probably bring the GBP/USD pair into a deeper bearish correction that extends down to 1.3000 where bullish recovery should be anticipated.
Conservative traders should wait for a 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