FX.co ★ Intraday technical levels and trading recommendations on GBP/USD for October 2, 2014

I mentioned the bearish shooting star daily candlestick that occurred previously around 61.8% Fibonacci level.

Such significant bearish pressure offered SELL positions at retesting that took place few days later.

Price level of 1.6140 is a key-level on the daily and weekly chart. Hence, we prefer to exit most of the sell positions taken around 1.6400 (61.8% Fibonacci level).

Also note the bullish rejection initiated when market pushed below 1.6100 and 1.6060.

For conservative traders, Long positions are favorable after such a long bearish movement and at such low prices.

Price levels around 1.6060 up to 1.6100 would probably offer a valid BUY entry. Just signs of bullish pressure is needed to confirm counter-trend position.

4H chart reveals long period of downside movement roughly maintained within the limits of the depicted channel.

The recent bullish leg which extended between 1.6060 ( the lower limit of the channel ) and price levels around 1.6400 looks strong compared to the recent bearish swings ( no obvious bearish trend structure and a weekly bearish gap (about 150 pips) enabled bears to test 1.6058 ).

High probability of reversal exists around 1.6100.

The bearish rejection off price levels around 1.6450 should be considered as well.

Recommendations :

We can BUY the pair around 1.6100 with our SL placed below 1.6050 with potential targets around 1.6300 and 1.6400.