FX.co ★ GBP/USD intraday technical levels and trading recommendations for December 18, 2013

On October 23, the GBP/USD pair broke initially the 1.6200 level hitting the area of 1.6250. However, most of the bullish gains were lost when the pair established a Double Top reversal pattern around 1.6200-1.6250.

Failure to break down the 1.5900 level was observed weeks ago. Instead, a bullish rejection led to another bullish swing again above 1.6200 which was bypassed so far.

As depicted in the chart, price levels around 1.6300 correspond to the multiple previous tops that were established in 2012. Knowing that the high of 2012 year was around 1.6350, the bulls were trying to record new highs before the end of 2013 and they were successful to hit 1.6464 as a new high for 2013.

Price area of 1.6440-1.6470 offered a bearish entry a week ago. Our initial targets were hit around demand zone at 1.6250.

The long-term view remains bullish as long as the bulls are defending the newly established demand zone around 1.6250.

Yesterday we mentioned Price Zone 1.6235-1.6250 as a considerable Demand zone for the cable. It did not take a long time to offer a valid BUY entry yesterday, our target level should be located at 1.6400.

Taking a look at the 4H chart, we find out that the pair is moving within a descending bearish channel.

Yesterday 1.6230 (the lower limit of the channel) provided DEMAND for the pair. Today, we should be looking carefully around the upper limit of the channel near 1.6400 to watch for any bearish rejection signs.