FX.co ★ Intraday technical levels and trading recommendations on GBP/USD for April 22, 2014

Previously, around the price zone of 1.6780-1.6800, a Double Top pattern scenario was established during February and March.

The full projection target was hit at 1.6464 (61.8% Fibonacci) after the bears managed to fixate below 1.6600 (reversal pattern neckline).

The recent lows at 1.6465 as well as 1.6555 (corresponding to the depicted uptrend line) prevented further bearish decline and provided enough buying pressure to keep fixing above 1.6630-1.6666 (corresponding to a prominent top established on January 24).

As long as the ascending bottom established at the uptrend around 1.6555, it remains intact, the bulls will be consolidating at the recent highs around 1.6780-1.6800.

The nearest demand zone to meet the pair is located at 1.6660-1.6675. It's the most recently established top on the current bullish swing.

A bearish pull-back towards 1.6660 -1.6675 was considered for buying. This position is running in profits now (+150 pips).

As long as 1.6660 and 1.6720 ( successive recent bottoms) remains defended by the bulls, our long position remains valid. However, it is risky to take new long positions at these high levels, especially after the inverted hammer daily candlestick was expressed on Thursday. That's why, partial profits taking should be executed at the current levels.  

The 4H chart reveals more significance of the demand zone around the recently broken top mentioned above in the daily chart.

This demand zone corresponds to 50% and 61.8% Fibonacci levels which is a critical demand zone for the ongoing bullish swing which offered a valid BUY entry on the recent bearish pull-back as expected.

Stop loss should be advanced to 1.6680 to offset the risk of this profitable position and price action should be watched around 1.6820 for a possible bullish breakout above 1.6845. 

Bullish breakout above 1.6800-1.6840 opens the way for a stronger bullish swing to follow through. Otherwise, the pair will remain consolidating around 1.6800. 

On the other hand, bearish pull-back towards 1.6730 is likely to occur to collect further bullish pressure especially after the bulls are failing to show enough bullish momentum above 1.6820.