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 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.
The current weekly candlestick closure should be monitored to determine the next destination of the pair as weekly closure above 1.5300 immediately exposes the price levels around 1.5500 (weekly 50% Fibonacci level).
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) 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.
Initial bullish targets are located at 1.5300, 1.5350 and 1.5430.
On the other hand, daily closure below the level of 1.4970 invalidates the ongoing bullish scenario giving more time for sideway movement for some time.
The material has been provided by InstaForex Company - www.instaforex.com