FX.co ★ July 2, 2019 : GBP/USD is demonstrating a high-probability short-term trend reversal.

Since May 17, the previous downside movement within the depicted bearish channel was paused allowing the recent sideway consolidation range to be established between 1.2750 - 1.2570 with a prominent key-level around 1.2650.

On June 4, temporary bullish consolidations above 1.2650 were demonstrated for a few trading sessions. However, the price level of 1.2750 (consolidation range upper limit) has prevented further bullish advancement.

That's why, the GBP/USD failed to establish a successful bullish breakout above 1.2750. Instead, early signs of bearish rejection have been manifested (Head & Shoulders reversal pattern with neckline located around 1.2650).

A quick bearish pullback towards 1.2650 was expected shortly.

Bearish breakdown below 1.2650 (reversal pattern neckline) confirms the reversal pattern with bearish projection target located at 1.2550 and 1.2510.

Short-term outlook remains under bearish pressure as long as the market keeps moving below 1.2650 (mid-range key-level and neckline of the reversal pattern).

Moreover, Obvious Bearish breakdown below 1.2570 confirms a trend reversal into bearish on the intermediate term. Immediate bearish decline would be expected towards 1.2505 initially.

On the other hand, a bullish position can ONLY be considered if EARLY Bullish persistence above 1.2650 is re-achieved on the current H4 chart.

Trade Recommendations:

Intraday traders can have a valid SELL Entry anywhere around the neckline of the depicted reversal pattern near 1.2650.

T/P levels to be located around 1.2600, 1.2550 and 1.2505.

S/L should be placed above 1.2700.