Significant SUPPLY levels located around 1.5300 (weekly 38.2% Fibonacci level) and 1.5500 (weekly 50% Fibonacci level) have been providing significant bearish pressure over the GBP/USD pair for a few months.
Evident bullish recovery emerged off the price levels near 1.4550 where a significant bullish engulfing weekly candlestick was expressed.
As mentioned in the previous articles, persistence above the zone of 1.5000-1.5080 exposed the weekly supply zone at 1.5500-1.5550 (roughly corresponding to weekly 50% Fibonacci level) where significant bearish pressure was applied.
Sideways movement with slight bearish tendency was expressed on the daily chart until a 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 a prominent DEMAND level for the GBP/USD pair. Hence, it will probably offer a valid buy entry at retesting.
On the other hand, daily closure below the level of 1.4970 invalidates the ongoing bullish scenario giving more time for indecisive sideway movement.
The material has been provided by InstaForex Company – www.instaforex.com