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 was 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.
As anticipated, a bearish pullback was executed towards the level of 1.5550. Evident bearish breakdown below 1.5500 already took place this week.
The weekly demand level around 1.5200 was exposed to be visited soon. However, the current weekly candlestick closure should be monitored by the end of the day.
Another WEEKLY closure above 1.5500 hinders further bearish decline. It allows a quick bullish pullback towards 1.5750 to occur.
A bearish breakout of the depicted bullish channel took place as a result of the bearish pressure around 1.5780 and 1.5660 (depicted on the chart with arrows).
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 of 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%).
Previously, the price zone of 1.5800-1.5880 acted as a significant supply zone for the GBP/USD pair. It offered a valid sell entry last week. All T/P levels were successfully reached.
On the other hand, the level at 1.5550 constituted a significant demand level (corresponding to 50% Fibonacci level and a previous prominent top). It was broken down on Tuesday allowing further bearish decline.
As anticipated, demand level of 1.5375 provided significant bullish support for the pair. Hence, a bullish pullback is currently taking place towards 1.5550 (50% Fibonacci Level).
A valid SELL entry can be offered anywhere around 1.5550. S/L can be placed above 1.5615. Initial T/P level would be located at 1.5375.
The material has been provided by InstaForex Company – www.instaforex.com