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 applied.
The current weekly candlestick closure should be monitored to determine the next destination of the pair as persistence above 1.5300 applies strong bullish pressure over the level of 1.5500 (weekly 50% Fibonacci level).
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) currently constitutes a 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 should be advanced to 1.5050 (just below entry levels) to offset the risk.
Bullish targets located at 1.5300, 1.5350 and 1.5430 were successfully achieved.
On the other hand, 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