FX.co ★ GBP/USD intraday technical levels and trading recommendations for October 20, 2014

Overview:

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

Many bearish impulses were previously initiated around 1.7180, 1.6630 and 1.6400 where the downtrend line came to meet the pair then.

The price zone of 1.6140 - 1.6100 constituted a weekly support that paused the bearish movement for a few days after September 9. However, the bears quickly managed to push below the price level of 1.6060.

A new bearish impulse was applied after retracement towards the price zone of 1.6350-1.6400 took place.

As suggested, price level of 1.5890 provided evident bullish recovery. A bullish engulfing daily candlestick emerged.

Since last week, the bulls were pushing towards the downtrend line (price zone around 1.6110) where another bearish swing is anticipated.

On the other hand, bullish fixtation above 1.6120 will liberate a strong bullish swing towards 1.6250 initially.

Trading recommendations:

Conservative traders should wait for bullish breakout above 1.6110 ( the depicted trend line ). It indicates a valid BUY entry towards 1.6250 and 1.6310. Stop Loss should be located below 1.6040.