03, June 2014

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

According to the last week results, the British sterling was the most vulnerable currency. The pound fell against the dollar on the first session half and its attempts to return the losses were observed on Friday, which only slightly altered the five days results.

The market tension will support expectations on the BoE monetary policy perspective - changes are not expected, but investors always fear surprises. The focus would be on lending, particularly on mortgage lending, in case if this market experiences a decrease, the pressure on the pound will resume. The external factors from the Eurozone and the U.S will have an impact on the pound as well.

This week trendline 1.6790 is broken so and the strong support level 1.6760. Such strong support breakthrough means a long uptrend ending in the medium term.

The price is finding the first support at 1.6730, the next one is at 1.6670. The price is finding the first resistance at 1.6800, the next one is at 1.6860.

The price is below the Cloud and above the Chinkou Span. The Kijun-Sen is directed downward. The Cloud is descending. The downward movement will be continued as long the price is under the Kijun-Sen.

The MACD histogram is in negative area. The indicator is decreasing showing the sell signals.

Trading recommendations

Please be advised to go short. Our targets are 1.6670 and 1.6630. The price bounces are possible still they only will lead to a decrease.