On July 26, Bearish breakdown below 1.2385 (Wedge-Pattern Key-Level) facilitated further bearish decline towards 1.2210 and 1.2100 which corresponded to significant key-levels on the Weekly chart.
In Early August, another consolidation-range was temporarily established above 1.2100 before August 9 when temporary bearish movement was executed towards 1.2025 (Previous Weekly-Bottom).
Recent bullish recovery was demonstrated off the recent bottom (1.2025).
This brought the GBP/USD pair back above 1.2100 (Lower limit of the recently established consolidation-zone) within the depicted short-term bullish channel.
As expected, further bullish advancement was demonstrated towards 1.2230 then 1.2280 where recent bearish rejection was demonstrated (near the upper limit of the recent movement channel).
That’s why, another quick bearish decline was demonstrated towards 1.2100 then 1.2000 (corresponding to the previous bottom established on August 9).
Last Week, Early signs of bullish recovery (Bullish Engulfing candlesticks) were manifested around 1.1960 bringing the GBPUSD back above 1.2100 and 1.2220 where the GBPUSD pair looked overbought.
However, further bullish momentum was demonstrated towards 1.2320 bringing the pair back inside the depicted movement channel again.
The Long-term outlook remains bearish as long as the upper limit of the current movement channel around 1.2400 remains defended by the GBPUSD bears.
Temporary bullish advancement may be demonstrated towards 1.2400 – 1.2420 where the upper limit of the current movement channel comes to meet the pair.
On the other hand, early bearish breakdown below 1.2270 turns the short-term outlook into bearish, thus allowing more bearish decline towards 1.2220 and 1.2100.
Conservative traders should wait for the current bullish movement to pursue towards 1.2400-1.2420 (upper limit of the depicted movement channel) for a valid SELL entry.
T/P level to be placed around 1.2300, 1.2250 then 1.2220 while S/L should be placed above 1.2450.