The GBP/USD currency pair witnessed quick decline from 1.6120 towards 1.5730 during last week.

The GBP/USD has Intraday support zone located around 1.5740 - 1.5760 which prevented further decline showing significant bullish price action.

Now the upper limit of the Violet channel and Resistance zone 1.5840-1.5860 are being tested by the GBP/USD pair which if broken will probably allow the pair to reach the upper limit of the Blue channel and the next Intraday resistance zone at 1.5940-1.5960.

After showing bullish price action towards 1.5740, this price level is considered a valid BUY entry with tight SL below 1.5700.

Breakdown of Price Zone 1.5960-1.5940 lead to quick decline towards 1.5860-1.5840 which was broken too, leading to price zone 1.5740-1.5760.
Price Zone 1.5740 - 1.5760 corresponds to the lower limit of the Yellow & Blue channels and also to the Average Daily Range which was indicative of possible bullish retracement coming after.
The GBP/USD has shown extensive bearish decline last Thursday exceeding the Average Daily range breaking its Intraday Support levels. However, today there are signs of bullish recovery manifested in breaking the upper limit of the Yellow channel.
There's a possible Head and shoulders being formed with head at 1.5730 which becomes confirmed with bullish closure above neck-line located at 1.5840 to be targeting to the price level of 1.5940.

Based on the previous analysis

The market offers a bullish opportunity at price zone 1.5750-1.5760 with a tight Stop Loss below 1.5700.

TP levels are to be located at 1.5810, 1.5885 and 1.5925.

If you like my articles, please vote for me in Analyst of the Year Contest by clicking here .