The chart shows a recent bearish trend in GBPUSD continuing as it tests along a long term bearish resistance line (point 1 on chart) and just tested below a short term bullish channel (point 2 on chart) after recently failing to hold along a short term steep bullish channel (point 3) after finding resistance on a medium term bearish support line (point 5). It will be critical to see if the long term bearish resistance line (point 1) will hold as it constitutes a significant part of the chart overall (having provided both resistance and support).
Overall, the very short-term trend has turned bearish (was previously bullish over medium and short term) and any failure on the long term bearish support line (point 1) which GBPUSD is testing currently, could be very bearish and may provide for a potential continuation of a short term bearish channel (point 4).
However, if support is found along this descending line (point 1) then although a less-bearish trend (or descent) could continue, there could first be a short term bounce and bullish run back up along a steep bullish line (point 3) providing support for a trend reversal.
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.5482 with a Limit to take profit @ 1.5585 and a stop-loss to cut losses @ 1.5403 Risk/Reward Summary: Limit risk = +103 pips profit / (-79) Stop-loss risk = Gain to Loss ratio = 1.30
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.5389, with a Limit to take profit @ 1.5277 and a stop-loss to cut losses @ 1.5466 Risk/Reward Summary: Limit risk = +112 pips profit / (-77) Stop-loss risk = Gain to Loss Ratio = 1.45