On December 12, the previously-dominating bearish momentum came to its 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 taken place until January 28, while 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 has been recently established around 1.3155.
The current bearish 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.
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. It's already running in profits. Final T/P level should be located around 1.3000. S/L should be located at the entry level to offset the associated risk.
On the other hand, 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 should be located around 1.3055, 1.3155, and 1.3200. Any bearish closure on H4 below 1.2950 invalidates this scenario.
The material has been provided by InstaForex Company - www.instaforex.com