In Early August, another consolidation-range was temporarily established between the price levels of (1.2100 – 1.2220) except on August 9 when temporary bearish decline below 1.2100 was executed towards 1.2025 (Previous Weekly-Bottom).
Since then, the GBP/USD pair has been trending-up within the depicted bullish channel except on September 3 when a temporary bearish breakout was demonstrated towards 1.1960.
Around the price level of 1.1960, aggressive signs of bullish recovery (Bullish Engulfing candlesticks) brought the GBPUSD back above 1.2230 where the pair looked overbought.
However, further bullish momentum was demonstrated towards 1.2320 maintaining the bullish movement inside the depicted movement channel.
Moreover, Temporary bullish advancement was demonstrated towards 1.2550 where a reversal wedge pattern was established.
As anticipated, the reversal wedge pattern was confirmed by the end of the previous Monday’s consolidations supported by obvious bearish price action demonstrating a successful bearish closure below 1.2450.
On Tuesday, the backside of the confirmed reversal wedge was successfully re-tested around 1.2500 where a new episode of bearish rejection was expressed.
The Long-term outlook remains bearish as long as the most recent top established around 1.2500 remains defended by the GBP/USD bears.
Bearish persistence below 1.2440-1.2400 (Reversal-Pattern Neckline) allowed more bearish decline to occur towards the price levels of 1.2300 where early signs of bullish rejection was demonstrated by the end of last week’s consolidations.
Conservative traders can wait for bullish pullback towards the backside of the broken channel (Anywhere around 1.2400-1.2450) for another valid SELL entry.
T/P level to be placed around 1.2360, 1.2330 and 1.2280 while S/L should be set as a H4 candlestick closure above 1.2450.