Evident bullish recovery emerged from the area around 1.4550 where significant bullish engulfing weekly candlesticks were 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, which provided evident supply for the GBP/USD pair.
As anticipated, a bearish pullback was executed towards the level of 1.5550. A bearish breakout below 1.5500 took place two weeks ago.
However, previous week's candlestick indicates bullish rejection besides a lack of strong bearish momentum below 1.5500.
The previous 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 (supply level) as long as bulls keep defending their key level at 1.5550 (50% Fibonacci level).
On the other hand, the nearest demand level around 1.5200 becomes exposed if GBP/USD bears manage to close again below the level of 1.5500 (a very low probability).
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.
Previously, the price zone of 1.5800-1.5880 acted as a significant supply zone. It offered a valid sell entry few weeks ago. 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 temporarily allowing further bearish decline towards 1.5350 where an ascending bottom had been recently established.
Last week, strong bullish price actions have been expressed. A bullish pullback towards 1.5600 has been taking place. The level of 1.5550 was breached during last week's consolidations.
The level of 1.5770 (61.8% Fibonacci level) is the nearest supply level. A counter-trend intraday sell entry can be offered when further retesting occurs.
On the other hand, intraday bullish demand should be expected around the level of 1.5550 (was tested Yesterday). An intraday buy position can be valid as long as bulls keep on defending the level of 1.5550 on a daily basis.
On the contrary, a daily closure below 1.5550 invalidates this bullish scenario, allowing a quick bearish decline towards 1.5470 and 1.5370.
The material has been provided by InstaForex Company – www.instaforex.com