On January 21, after the GBP/USD pair moved below 1.4340, evident signs of a bullish recovery were expressed around 1.4075. Hence, previous weekly candlesticks closed above 1.4340 again.
Bullish persistence above 1.4488 was mandatory to maintain enough bullish strength in the market. The first bullish target was seen at 1.4615 where the most recent bearish swing was initiated.
As previous weekly candlesticks maintained their bearish persistence below the depicted demand zone (below 1.4340), the next demand level located at 1.3845 (historical bottom that goes back to March 2009) provided significant bullish rejection on February 26.
As expected, an evident bullish recovery and a bullish engulfing weekly candlestick were expressed around 1.3850 (prominent weekly demand level). That is why, a valid buy entry was suggested near the same level.
Recently, the price zone of 1.4340-1.4488 has been a significant supply zone during the past few weeks.
Bullish persistence above the price level of 1.4488 will allow a quick bullish movement to occur towards 1.4620.
Otherwise, a quick bearish movement towards the price levels of 1.4060 and 1.3960 should be expected.
A recent lower high was achieved around the level of 1.4530. This applied extensive bearish pressure against the price level of 1.4340.
Hence, an extensive bearish breakout below 1.4340 was expressed on the daily chart. The GBP/USD pair looked oversold few weeks ago.
That is why, signs of bullish recovery and a profitable long entry were expected around 1.3850. A recent bullish swing was expressed towards the price levels around 1.4400.
On March 14, a recent bearish movement was initiated around 1.4350 (61.8% Fibonacci level). The nearest bearish target was located around 1.4050 where the current bullish swing was initiated.
Last week, the price level of 1.4488 was being challenged. It corresponded to the 79.6% Fibonacci level and the backside of the depicted uptrend line. That is where the recent bearish swing was initiated towards 1.4050.
The price zone of 1.4340-1.4490 constitutes a significant supply zone to be watched for evident bearish rejection and a valid SELL entry.
Today, daily persistence below 1.4340 (61.8% Fibonacci level) is needed to ensure further bearish decline. Estimated bearish targets are located at 1.4060 and 1.3960.
Otherwise, if bullish persistence above 1.4490 is achieved, a bullish movement towards 1.4650 should be expected (low probability).
The material has been provided by InstaForex Company – www.instaforex.com
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