Evident bullish recovery emerged from the area around 1.4550 where significant bullish engulfing weekly candlesticks were expressed.
Shortly after, persistence above the levels of 1.5000-1.5080 exposed the weekly key zone of 1.5500-1.5550 where significant bearish pressure was previously applied on February 22.
Last month, the market was pushed above this weekly key zone around 1.5550 in an attempt to reach the area around 1.5900, which provided evident supply for the GBP/USD pair.
As anticipated, a bearish pullback was executed towards the level of 1.5550. A bearish breakout below 1.5500 took place two weeks ago.
However, the candlestick of the previous week indicates bullish rejection besides a lack of strong bearish momentum below 1.5500.
The previous weekly candlestick closure above 1.5500 hindered further bearish decline and enhanced the bullish side of the market temporarily.
Last week, strong bearish pressure has been applied against the price level of 1.5550. It was already breached last week on Thursday.
The nearest demand level around 1.5200 will become exposed if GBP/USD bears manage to maintain their WEEKLY closure below the level of 1.5500.
Previously, the price zone of 1.5800-1.5880 acted as a significant supply zone. It offered a valid sell entry few weeks ago. All T/P levels were successfully reached.
On the other hand, the level at 1.5550 (corresponding to 50% Fibonacci level and a previous prominent top) was broken temporarily allowing further bearish decline towards 1.5350 where an ascending bottom had been recently established.
Last week, strong bullish price actions have been expressed. A bullish pullback towards 1.5600 has been taking place. The level of 1.5550 was breached during last week's consolidations.
The level of 1.5770 (61.8% Fibonacci level) is the nearest supply level. A counter-trend intraday sell entry can be offered when further retesting occurs.
However, Thursday's candlestick came as a bearish engulfing one which enhanced the bearish side of the market.
That is why, the price level of 1.5550 now constitutes a significant SUPPLY level to be watched for significant bearish price action.
A quick bearish decline towards 1.5470 and 1.5370 should be expected as long as GBP/USD bears keep defending their recent supply level around 1.5550 (50% Fibonacci level).
The material has been provided by InstaForex Company - www.instaforex.com