02, December 2014

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

The PMI service sector indices release will show a decline by 0.1% in November as the Wall Street economists expected. It is worth noting that at the moment traders are pessimistic about the British pound and even the positive report will not be able to reverse the bearish trend. The Brent oil is approaching the minimum value of 2010 that will also enhance the demand for the US dollar.

The sellers updated the last month low at the level of 1.5590, but they failed to consolidate below the support level of 1.5600. The pair came back to the mark of 1.5745.

The price is finding the first support at 1.5660, the next one is at 1.5550. The price is finding the first resistance at 1.5870, the next one is at 1.5950.

There is a non-confirmed and a weak buy signal. The price is above the Cloud and it is above the Chinkou Span. The Tenkan-sen and the Kijun-sen show a horizontal movement and form a “Dead Cross”. The upward movement will be until the price is above the Cloud.

The MACD histogram is in a neutral territory. The price is correcting.

Trading recommendations

The support level of 1.5660 retest is more likely to lead to the strong price resistance level of 1.5870 return.