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.
Hence, significant bearish rejection and a strong bearish weekly candlesticks were executed around the upper limit of it (1.4670 level) for many successive weeks.
As long as the GBP/USD pair keeps trading below the levels of 1.4670 and 1.4480, next bearish destinations will be located at 1.4100, 1.4050, and probably 1.3900.
On the other hand, bullish fixation above 1.4670 brings further bullish advancement initially towards 1.4950 ( Inverted Head and Shoulders reversal pattern ).
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.
Currently, the price zone between 1.4670-1.4700 (61.8% Fibonacci level) should be watched for another valid SELL entry if significant bearish rejection is expressed (Yesterday's inverted hammer candlestick indicates bearish rejection).
Bearish persistence below 1.4470 will be needed to enhance further bearish decline towards 1.4200 and 1.4050. Otherwise, the bearish scenario will be invalidated for some time.
On the other hand, bullish persistence above 1.4670-1.4700 allows further bullish advancement towards 1.4950 initially.
The material has been provided by InstaForex Company - www.instaforex.com