FX.co ★ Intraday technical levels and trading recommendations for GBP/USD for May 29, 2015

Evident bullish recovery emerged from the area around 1.4550 where a significant bullish engulfing weekly candlestick was expressed.

As mentioned before, persistence above the levels of 1.5000-1.5080 exposed the weekly supply zone of 1.5500-1.5550 (roughly corresponding to weekly 50% Fibonacci level), where a significant bearish pressure was previously applied on February 22.

Two weeks ago, the market has already pushed above the weekly supply at 1.5530 (50% Fibo level) and slightly above 1.5720 (FE 100%) until the evident bearish pressure was applied around 1.5800, resulting in the depicted bearish engulfing weekly candlestick.

Note that persistence below the weekly supply at 1.5530 (corresponding to 50% Fibo level) hinders the ongoing bullish swing. It gives more time for sideways movement with a bearish tendency.

Sideways movement with a slight bearish tendency had been expressed on the daily chart until the bullish breakout took place above 1.4970-1.5000 (via a long-term bullish reversal pattern).

The price zone between 1.5000 and 1.5100 failed to keep prices below. Moreover, it constituted a prominent demand zone for the GBP/USD pair while trending within the depicted bullish channel.

A daily closure above the weekly supply zone of 1.5500-1.5530 exposed the next supply level located at 1.5720 (100% Fibonacci Expansion of the recent bullish swing) where evident bearish pressure was applied.

Bearish breakout off the depicted bullish channel took place on Friday as a result of the evident bearish pressure that emerged at the level of 1.5660.

Persistence below 1.5450 (lower limit of the broken channel) is needed to maintain the current bearish momentum.

A bullish pullback towards 1.5450, will probably offer a valid sell entry for those who missed the initial breakout.

Initial bearish targets would be located at 1.5250 and probably at 1.5100 (Depicted Demand Level) where a short-term buy entry may be offered.