01, October 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

We do not see the pound above the high of 2012 at 1.6381. British economic news are a little better, but it is only in the last month, unemployment fell from 7.8 to 7.7, and things can change dramatically for the worse in the winter months.

However, the pair is near the 1.62 level where it was in last year December and only 30 pips away. Therefore we can expect this resistance to be tested.

GBP/USD was being traded at 1.6163 high last week and despite the end of the rally, growth is limited by the resistance 1.6180. Initial bias remains neutral. The breakthrough of 1.6180 will resume recent rally and should target the pair to 1.6380. On the other hand, a decline below 1.5955 will bring deeper retreat to 1.5716.

The current buy signal is strong and confirmed, as Chinkou Span is above the price and the price broke the Ichimoku cloud. The Kijun -Sen and Tenkan -Sen are crossed in a "golden cross" on a daily chart. Both trend lines are growing parallel to each other. The cloud is growing.

Bollinger Bands shows an upward movement. The bands are widening and going up. We should consider a long position.
The MACD histogram is growing.

Trading Recommendations

The key resistance levels that can keep the bulls are behind the price. Strengthening of the dollar could affect the return of the pound over the support level 1.6140. If this does not happen today, the two levels of support: 1.6100 and 1.6050 will be the targets of the corrective pullback.