On March 2, a bearish breakout of the lower limit of the previous daily channel occurred enhancing the bearish side of the market. Persistence below the zone between 1.4950 and 1.5000 indicated a further bearish decline towards 1.4700.
Shortly after, the bearish trend was resumed towards the level of 1.4550 where a lower daily bottom (which initiated the ongoing bullish swing) was reached. A daily closure above 1.5060 exposed the next resistance levels at 1.5400 and 1.5450 where a temporary bearish pullback took place on April 29.
The next bullish swing extended up to the levels of 1.5750-1.5800 which offered a valid sell entry. The final bearish target at 1.5450 was already reached.
Recently, higher highs around the level of 1.5200 were hit. That applied strong bullish pressure over the resistance level around 1.5800 via the ongoing bullish swing.
That is why, the resistance level at 1.5800 was temporarily breached by the strong bullish momentum. Hence, GBP/USD bulls pursued towards 100% Fibonacci Expansion located around 1.5900.
Risky traders could have taken a valid sell entry anywhere around 1.5900-1.5930. It is already running in profits now.
On the other hand, the price level of 1.5780 remains a significant resistance level which provided extensive bearish rejection previously on May 15.
Conservative traders can wait for a pullback towards 1.5780 for a low-risk sell entry. Initial T/P levels are located at 1.5780, 1.5700 and 1.5600 while S/L should be set above 1.5900.
The material has been provided by InstaForex Company – www.instaforex.com