From 1.5600 to 1.6060 the GBP/USD pair was considered as bullish as it was moving within the depicted bullish channel which has been broken through last week.
The GBP/USD pair showed the massive bearish reaction after testing the 1.6060 level and breaking down 1.5880 - the prominent support level, reaching the point 1.5830, which is a support level on the 4H chart (50% Fibonacci level).
However the GBP/USD pair showed the massive bearish reaction that was able to break down the lower limit of the depicted channel. We expected bullish strength at 1.5830 to come into the market towards 1.5960 - 1.5990, hence as expected, 1.5830 constituted a solid short-term BUY entry towards 1.5945-1.5970.
Proceeding from the previous price action to the current price zone 1.5830-1.6060 we can see that the GBP/USD pair is probably forming a H&S reversal pattern with neckline at 1.5830 and the right shoulder that is expected to be placed around 1.5970-1.5990 which constitutes a valid low/risk SELL entry which was triggered Yesterday with initial profit untill now.
Breakthrough above the last recorded high at 1.6062 invalidates the bearish scenario. However, a breakdown of 1.5830 will confirm the reversal pattern allowing the GBP/USD to reach 1.5777 and 1.5650.