On February 4, the market failed to close above 1.4615. An inverted hammer daily candlestick was expressed. Hence, a bearish pullback took place towards 1.4360.
Note that the GBP/USD pair was trapped between 1.4615 and 1.4220 until a recent lower high was established at the level of 1.4530. This applied extensive bearish pressure to 1.4220.
Hence, an extensive bearish breakout below 1.4220 was expressed on the daily chart (GBP/USD looked oversold this week).
That is why, signs of bullish recovery and a possible long entry were expected around 1.3850. A recent bullish swing is currently being expressed towards 1.4150 and 1.4220.
On the other hand, the broken demand zone (1.4360-1.4222) now constitutes a significant supply zone to offer a bearish rejection when any upcoming bullish pullback occurs.
Note that the price level of 1.4030 is now standing as a prominent key level to offer bullish support if any bearish pullback occurs soon.
Conservative traders could take a valid entry around the price zone of 1.3850. It is already running in profits. T/P levels should be located at 1.4150 and 1.4230.
On the other hand, price action should be watched around the price zone of 1.4222-1.4360 for a valid SELL entry. S/L should be placed above 1.4370.
Moreover, risky traders can wait for signs of bullish recovery around 1.4030 if any bearish pullback occurs soon.