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

Overview:

On July 15, extensive bearish impulse was initiated. Since then, the GBP/USD pair has been downtrending below the depicted downtrend line.

Two bearish impulses were previously initiated around 1.7180 and 1.6630 corresponding to the downtrend line.

The price level of 1.6140 constituted a prominent weekly support to meet the pair. Bullish rejection was witnessed in the previous visit. This led to bullish weekly closure ( above the weekly support level around 1.6250 ).

Retracement towards the price zone of 1.6350-1.6400 took place as expected where a new bearish impulse was applied as expected in previous articles.

This price zone corresponds to the upper limit of the depicted channels as well as Fibonacci level of the recent bearish impulse between 1.7180 and 1.6060.

The GBP/USD pair remains targeting at 1.6050 ( the recent weekly low ) as long as the market is trading below 1.6240 on a daily basis.

Trading recommendations:

Based on the previous data, the market offered a valid SELL opportunity around 1.6460 during last week's consolidations.

This short position remains valid as long as the bears keep defending price zone of 1.6250-1.6320 ( 23.6% Fibonacci level and previous broken bottom ). Hence, Stop Loss should be located slightly above these price zone. This secures some of the profits.

Bearish targets are located around 1.6160 ( already reached ) and 1.6080 to come next.