GBPUSD Watching 1.3600 for a Trade

After a strong uptrend from January, the price entered a corrective phase in July. An initial Head and Shoulders topping pattern appeared to cause a breakdown. While the break-down extended the downside correction, it failed to sustain momentum as a new established down-trend, finding significant support at 38.6 retracement level. The subsequent price recovery has now formed a potential inverse Head and Shoulders pattern, suggesting a possible continuation of the longer-term uptrend.

What Actually Happened

1. Bearish pattern failed to achieve full target: The H & S neckline support initially suggested a potential trend reversal to the downside.

2. Key support level: The downward move was halted at the 38.2% Fibonacci retracement level 1.3143. This level, derived from the overall uptrend that started in January to July 1st high at 1.3788. The price also found support near the 200-day Simple Moving Average.

3. Bullish reversal signals: Following the bounce from the Fibonacci support, the price has shown several signs of strength:
   - It has moved back above the neckline of the prior, failed Head and Shoulders pattern.
   - It has broken a short-term falling trendline that had defined the recent correction.

4. Emerging bullish pattern: The price action is now forming a potential inverse Head and Shoulders pattern, which is typically a bullish reversal formation. The recent swing low could be a possible right shoulder.

What to Watch Next

I am watching the 1.3600 level right now for the next trade. This is the make-or-break point.
If we can push through and hold above 1.3600, it would confirm the bullish pattern and open the door for a move toward the major highs around 1.3788 as an initial target.
On the flip side, if the market stalls at 1.3600 and turns lower, I will be watching a signal of reversal such as a bearish reversal candle. A failure there could send us back to test those support levels among 1.3400-1.3375 again.