Visiting resistance level 1.5870 showed BEARISH price action forming a possible Head and Shoulders reversal pattern with neckline at 1.5785 which turned our view for the pair into BEARISH.
Selling was suggested last Thursday at the the resistance 1.5870 forming the right shoulder of the H&S pattern with profit till now which needs to be confirmed with 4H closure below 1.5785.
We also mentioned that GBP/USD support area marked in blue on the chart at 1.5734-1.5750 which is the lower limit of both consolidation range & the newly formed bullish channel should be watched for a possible intraday reversal which happened during the last few hours of Friday.
Reversal of price at this support area pushed the pair to retest 1.5800-1.5835 mentioned yesterday which was our suggested short entry which gave about +115 pips before it reversed to retest the broken support.
Also the pair managed to break this support area with 4H closure below 1.5734 which is an indicator for the bearish domination of the market now.
Break of this support area 1.5734-1.5750 will open the way for a quick decline of GBP/USD price to its targets after successful retesting of it which is taking place now.
Based on the previous analysis
We suggest holding the SHORT position taken at 1.5800-1.5830 for a further targets at 1.5730,1.5674 then 1.5550 with SL placed slightly above 1.5860.
For those who didn't take this trade yesterday, it's suggested to take a short entry around 1.5760 with the same TP levels and SL.
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