Evident bullish recovery emerged from the area around 1.4550 where a significant bullish engulfing weekly candlestick was expressed.
As mentioned before, 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.
Last week, the market has already pushed above the weekly supply (1.5530) and 1.5720 (FE 100%). That is why the current weekly candle closure should be monitored to determine the next destination of the pair.
Note that persistence above the weekly supply at 1.5530 (also corresponding to 50% Fibo level) hinders the long-term bearish trend for some time.
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 long-term bullish reversal pattern).
The price zone between 1.5000 and 1.5050 (daily 38.2% and 50% Fibonacci levels) failed to hold. Moreover, it constitutes a prominent demand level for the GBP/USD pair now.
It offered a valid buy entry for retesting that took place last week.
A daily closure above the weekly supply zone 1.5500-1.5530 exposed the next supply level located at 1.5720 (100% Fibonacci Expansion of the recent bullish swing).
Evident bearish pressure was applied around 1.5720 (100% FE and the upper limit of the depicted bullish channel) so bearish pullback took place towards 1.5500 earlier yesterday.
The price zone (1.5450-1.5500) constitutes a prominent demand zone which offered a valid BUY entry yesterday. It is running in profits now.
Persistence above 1.5720 (100% FE) is needed to pursue towards higher levels. Initial bullish target would be located at 1.5950 (FE 141.4%).
The material has been provided by InstaForex Company - www.instaforex.com