Since August 9, 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 on September 23 supported by obvious bearish price action demonstrating a successful bearish closure below 1.2450.

On September 25, the depicted bullish channel was finally terminated with significant full-body bearish candlesticks which managed to achieve bearish closure below 1.2395.

The Short-term outlook remains bearish as long as the most recent top established around 1.2400 remains defended by the GBP/USD bears.

Bearish persistence below 1.2400-1.2440 (Reversal-Pattern Neckline) allowed more bearish decline to occur towards the price levels of 1.2210 where recent bullish pullback towards 1.2400 was originated on October 2.

This week, the price level of 1.2400 remains a significant SUPPLY level to be watched for SELL entries if any bullish pullback occurs.

On the other hand, bearish persistence below 1.2220 is mandatory to allow further bearish decline towards 1.2160 and 1.2120.

Trade Recommendations:

Conservative traders are advised to consider any bullish pullback towards the neckline of the confirmed reversal pattern (Anywhere around 1.2400-1.2450) as a valid SELL entry.

T/P levels to be placed around 1.2330, 1.2280, 1.2240 and 1.2160 while S/L should be placed above 1.2450.