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.
The market has been already pushed above this weekly level at 1.5550 in an attempt to reach price levels around 1.5900 (100% Fibonacci Expansion).
It should act as a prominent SUPPLY for the GBP/USD pair. It may enhance a bearish pullback movement towards 1.5550 provided that no weekly candlestick closes above 1.5900.
Sideways movement with a slight bearish tendency had been expressed on the daily chart until a bullish breakout took place above 1.4970-1.5000 (through a long-term bullish reversal pattern).
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 evident bearish pressure was applied.
A bearish breakout off the depicted bullish channel took place as a result of the bearish pressure which originated around 1.5780 and 1.5660 (bearish engulfing candlesticks and lower highs).
After a 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.
Instead, significant bullish pressure originated around 1.5200. Hence, a bullish swing is currently taking place towards 1.5780 (61.8% Fibonacci level) and 1.5880 (FE 100%).
It is likely to offer a valid sell entry if enough bearish momentum is expressed. S/L should be set as daily closure above 1.5900.
The material has been provided by InstaForex Company – www.instaforex.com