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.
This 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).
It should act as prominent supply for the GBP/USD pair. It may enhance a bearish pullback towards 1.5550 proving that no weekly closure occurs 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 which originated 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 originated around 1.5200. Hence, a bullish swing towards 1.5780 (61.8% Fibonacci level) and 1.5880 (FE 100%) is currently taking place.
The current price zone (1.5800-1.5880) is likely to offer a valid sell entry if enough bearish momentum is expressed. T/P levels should be set at 1.5700, 1.5650, and 1.5600 while S/L should be placed above 1.5900.
The material has been provided by InstaForex Company – www.instaforex.com