Since January 2016, bullish persistence above 1.4500 was mandatory to maintain enough bullish strength in the market.
However, the previous weekly candlesticks maintained their bearish persistence below the depicted weekly supply zone (below 1.4470), which allowed further bearish decline to occur.
The prominent demand level located at 1.3845 (historical bottom that goes back to March 2009) provided a significant bullish rejection on February 26.
As expected, an evident bullish recovery and a bullish engulfing weekly candlestick were expressed around 1.3845 (prominent weekly demand level) where a significant bullish swing was initiated on March 1.
On the other hand, the price zone of 1.4475-1.4670 has been standing as a significant supply zone during the past few weeks.
When the GBP/USD pair was trading below the levels of 1.4670 and 1.4480, next bearish destinations were located at 1.4100, 1.4050 where the depicted bullish hammer weekly candlestick was initiated.
Currently, the weekly chart illustrates an inverted head and shoulder reversal pattern. The neckline for which is located around 1.4480-1.4670. Final bullish target would be located at 1.5250.
That's why, Bullish fixation above 1.4670 brings further bullish advancement initially towards 1.4950 where temporary bearish rejection should be expected.
The price zone of 1.4670-1.4700 (61.8% Fibonacci level and depicted downtrend line) stood as a significant supply zone which offered many valid SELL opportunities over the past few weeks.
Daily persistence below the level of 1.4470 enhanced further bearish decline towards 1.4350, 1.4220, and 1.4040.
As anticipated, the depicted demand level around 1.4040 offered a profitable BUY entry. It is already running in profits today.
The price zone between 1.4670-1.4700 (61.8% Fibonacci level) failed to apply significant bearish rejection.
Instead, bullish persistence above 1.4670-1.4700 allowed further bullish advancement towards 1.4950 (79.6% Fibonacci Level) where temporary bearish rejection should be expected.
Currently, the price zone between 1.4670-1.4700 (61.8% Fibonacci level) constitutes a new demand level to be watched for a valid buy entry if bearish pullback takes place.
On the other hand, bullish persistence above 1.4950 allows further bullish advancement towards 1.5250 (Projection target for the reversal pattern).
The material has been provided by InstaForex Company - www.instaforex.com