Significant supply levels located around 1.5300 (weekly 38.2% Fibonacci level) and 1.5500 (weekly 50% Fibonacci level) have been providing significant supply over the GBP/USD pair for a few months.
Evident bullish recovery emerged from the area around 1.4550 where a significant bullish engulfing weekly candlestick was expressed.
As mentioned in the previous articles, 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 significant bearish pressure was previously applied on February 22.
The current weekly candlestick closure should be monitored to determine the next destination of the pair as persistence above the weekly supply at 1.5530 has been pausing the ongoing bearish trend for a few weeks.
Sideways movement with slight bearish tendency had been expressed on the daily chart until the bullish breakout took place above 1.4970-1.5000 (via a Full-body bullish candlesticks).
The price zone between 1.5000 and 1.5050 (daily 38.2% and 50% Fibonacci levels) constitutes the prominent demand level for the GBP/USD pair.
As anticipated, it offered a valid buy entry at retesting that took place on Tuesday. S/L can be advanced to 1.5250 to secure some profits now.
A daily closure above the weekly supply zone 1.5500-1.5530 exposes the next supply level located at 1.5720 (100% Fibonacci Expansion of the recent bullish swing).
The material has been provided by InstaForex Company – www.instaforex.com