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 supply zone of 1.5500-1.5550 (roughly corresponding to weekly 50% Fibonacci level), where a significant bearish pressure was previously applied on February 22.
The market has been already pushed above the weekly supply at 1.5530 (50% Fibo level) and slightly above 1.5720 (FE 100%), until the evident bearish pressure was applied around 1.5800 resulting in the recent two bearish engulfing weekly candlesticks.
Note that persistence below the weekly supply at 1.5530 (corresponding to 50% Fibo level) hinders the ongoing bullish swing. It gives more time for sideways movement with a strong bearish tendency.
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, it formed a prominent demand zone for the GBP/USD pair while trending within the depicted bullish channel.
A daily closure above the weekly supply zone of 1.5500-1.5530 exposed the next supply level located at 1.5720 (100% Fibonacci Expansion of the recent bullish swing) where evident bearish pressure was applied.
A bearish breakout off the depicted bullish channel took place as a result of the bearish pressure at 1.5660 (lower high).
Persistence below 1.5450 (lower limit of the broken channel) is needed to maintain current bearish momentum towards the intraday demand level at 1.5100
However, a bullish pullback towards 1.5450 (intraday supply) will probably offer a valid sell entry for those who missed the initial breakout.
Initial bearish targets would be located at 1.5250 and at 1.5100 (depicted demand level) where a short-term buy entry can be offered.
The material has been provided by InstaForex Company – www.instaforex.com