Evident bullish recovery emerged from the area around 1.4550 where a significant bullish engulfing weekly candlestick was expressed.
Shortly after, persistence above the levels of 1.5000-1.5080 exposed the weekly key zone of 1.5500-1.5550 where significant bearish pressure was previously applied on February 22.
Last month, the market has been pushed above this weekly key zone at 1.5550 in an attempt to reach the area around 1.5900 (100% Fibonacci Expansion) which provided evident supply for the GBP/USD pair.
This SUPPLY level will probably enhance a bearish pullback towards 1.5550 if the level of 1.5900 remains intact on a weekly basis (no weekly closure should occur above 1.5900).
Sideways movement with a slight bearish tendency had been expressed on the daily chart until a bullish breakout above 1.4970-1.5000 (through a long-term bullish reversal pattern) took place.
The zone between 1.5000 and 1.5100 failed to keep prices below. Moreover, the GBP/USD pair formed a prominent demand zone while trending within the depicted bullish channel.
A daily closure above the weekly supply zone of 1.5500-1.5550 exposed the next supply level located at 1.5780 (61.8% Fibonacci level) where the evident bearish pressure was applied.
A bearish breakout of the depicted bullish channel took place as a result of the bearish pressure applied around 1.5780 and 1.5660 (bearish engulfing candlesticks and lower highs).
After a bearish breakout of 1.5500-1.5550 (lower limit of the broken channel), the market failed to gather enough bearish momentum towards the intraday demand level at 1.5100.
Significant bullish pressure was observed around 1.5200. Hence, a bullish swing was established towards 1.5780 (61.8% Fibonacci level) and 1.5880 (FE 100%).
The price zone (1.5800-1.5880) remains a significant supply zone to be watched at further retesting.
As anticipated, It offered a valid SELL entry last week. It is running in profits now. S/L should be lowered to 1.5800 to offset the risk.
T/P levels should be set at 1.5700, 1.5650 and 1.5600.
The material has been provided by InstaForex Company – www.instaforex.com