FX.co ★ GBP/USD intraday technical levels and trading recommendations for August 14, 2013

This significant resistance around 1.5400 managed to put bearish pressure leading towards quick retracement reaching daily demand level around 1.5200 (the previous uptrend line).

Last week, strong bullish pressure was applied at retesting 50% Fibonacci resulting in bullish engulfing candlestick extending further above 1.5400 (61.8% Fibonacci). This opened the way directly to 78% Fibonacci around 1.5550 which constitutes significant Intraday resistance.

On Friday, bearish pressure was applied around 78% Fibonacci around 1.5550 resulting in bearish Harami daily candlestick which was followed by today's quick retesting of previous day's high around 1.5508 which failed to fixate higher.

This events enhanced corrective movement towards 1.5420 where strong bullish pressure was manifested today resulting in getting back towards 1.5550.

The cable established ascending bottoms around 1.5100, 1.5210 and recently 1.5420 supporting the ongoing bullish bias for the pair.

As long as these structures remain unbroken within the depicted consolidation range, the bulls would remain in control of the market. However, it should be mentioned that a possible bearish Head and Shoulders pattern may be formed as depicted on the chart. It needs breakdown of the neckline around 1.5420 to pursue the bearish targets.

This pattern is invalidated if the bulls expressed 4H closure above 1.5550 resulting in a possible bullish entry with target located around 1.5610 initially.

A counter-trend sell entry may be suggested around 1.5550 (backside of the broken channel and Fibonacci 78%) with SL as 4H closure above 1.5550, targets should be set at 1.5450 then 1.5400.