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 around 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. Temporary bearish breakdown below 1.5500 took place last week.
However, the resulting previous weekly candlestick indicates bullish rejection besides lack of strong bearish momentum below 1.5500.
Another weekly candlestick closure above 1.5500 hinders further bearish decline and enhances the bullish side of the market. It allows a quick bullish pullback towards 1.5750 to occur shortly after.
On the other hand, the nearest weekly demand level around 1.5200 becomes exposed only if GBP/USD bears manage to achieve a weekly candle closure below the price level of 1.5500.
After a bearish breakout of the lower limit of the depicted bullish channel (roughly around 1.5500-1.5550), 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 (corresponding to 50% Fibonacci level and a previous prominent top) was broken down on Tuesday allowing further bearish decline towards 1.5350 where an ascending bottom was recently established.
This week, quite strong bullish price actions have been expressed. A bullish pullback towards 1.5600 has been taking place. The price level of 1.5550 was breached during yesterday's consolidations.
The level of 1.5770 (61.8% Fibonacci level) is the nearest supply level to meet the pair. A counter-trend intraday SELL entry can be offered around there.
On the other hand, intraday bullish demand should be applied around the level of 1.5550 if bearish pullback occurs soon enough.
The material has been provided by InstaForex Company – www.instaforex.com