Few months ago, the market was pushed above the weekly key zone around 1.5550 in an attempt to reach the area of 1.5900, which has been providing the GBP/USD pair with evident resistance.
The previous weekly candlestick closure above 1.5500 hindered a further bearish decline and enhanced the bullish side of the market towards 1.5670 (previous weekly high) and 1.5780 (61.8% Fibonacci level).
However, recent weekly candlesticks came as bearish engulfing candles, closing below the level of 1.5450 (neckline of the Head and Shoulders pattern).
It supports the bearish side of the market in the long term. An approximate projection target should be located at the level of 1.5050 for the reversal pattern.
In the short term, the nearest demand level is located around 1.5170 (recent weekly bottom and the origin of a previous bullish engulfing weekly candlestick).
Weekly persistence below the zone of 1.5170 (the current demand level) is mandatory to allow the further bearish decline to occur.
On the other hand, persistence above it hinders the current bearish momentum giving time for more sideways consolidations which may extend towards the price level of 1.5350 which is being tested.
Prominent supply/resistance is seen around the level of 1.5770 (prominent 61.8% Fibonacci level) where the right shoulder of the depicted bearish reversal pattern is observed.
That is why, the valid sell entry was suggested for retesting at 1.5770 one month ago. All of its targets were successfully achieved.
Moreover, the previous bearish movement found its way towards the level of 1.5200 (prominent demand level), which prevented further bearish decline.
Instead of it, evident bullish candlestick took place around 1.5200-1.5170 (resulting in bullish engulfing daily candlesticks) leading to the recent bullish pullback towards 1.5600 (the backside of the depicted uptrend). It applied significant bearish pressure to the GBP/USD pair.
As anticipated, obvious bullish pressure was expressed around the zone of 1.5150-1.5200 (previous prominent weekly bottoms). Since then, bulls have been pushing towards 1.5350.
Note that daily fixation below 1.5150 is needed to allow bearish movement to occur towards the level of 1.4970 (weekly demand level).
On the other hand, the level of 1.5350 remains the significant supply level to be watched for valid intraday sell entries. It is being tested today.
A valid sell entry can be offered around the price level of 1.5350 as it corresponds to a prominent previous bottom. SL should be placed above 1.5450.
On the other hand, a low-risk buy entry can be offered around the weekly demand level (1.4970) if a bearish breakdown of 1.5150 occurs soon. S/L should be placed below 1.4930.