FX.co ★ Intraday technical levels and trading recommendations on GBP/USD for September 26, 2014

After testing price levels around 1.7180 in July, the bears initiated the manifested downtrend which is maintained within the depicted bearish channel.

The previous weekly bearish gap (about 150 pips) enabled the bears to test 1.6058 shortly after ( on Tuesday ).

Significant bullish recovery was manifested around 1.6070. Bullish engulfing daily candlesticks were expressed during this week shooting towards 61.8% Fibonacci level located around 1.6400.

Price level of 1.6400 stands as a prominent daily resistance. This price zone corresponds to 61.8% Fibonacci level as well as the upper limit of the current movement channel.

The bearish scenario is enhanced by current shooting-star daily candlestick when the pair spoke up to 1.6515 earlier on Friday. Daily closure within the channel is necessary to pursue the downtrend.  

The GBP/USD pair has been down-trending for almost six weeks. Moreover, evident bearish momentum keeps pushing lower without significant bullish correction.

As expected, bullish fixation above price level of 1.6150 ( Tuesday's highest level ) and 1.6275 (neckline of the 123 reversal pattern) allowed a bullish corrective move to take place towards 1.6350 and 1.6410 ( 61.8% Fibonacci Levels ).

The updates that Scotland will remain in the United Kingdom allowed the bullish spike towards 1.6515 to take place on Friday. However, immediate bearish rejection was expressed shortly after.

Technically, a valid SELL entry was suggested at retesting of price levels around 1.6410. This position is running in profits now. 4H fixation below 1.6330 is essential to pursue the current bearish movement.

This is enhanced by the successive lower highs being expressed on the 4H chart during the past few days.