04, October 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

GBP/USD continues its upward movement, but Dmytro Bondar, technical analyst at RBS, said that its profitable days are numbered: "Recently ( October 1), the price formed a candlestick pattern "shooting star" just below 1.6277 which is the key objective of 161.8 % Fibonacci projection of the pulse wave in July and August. At the same time oscillators formed a bearish divergence suggesting the probability of a reversal. If that happens then the movement can be significant so long as the diagram suggests that the cable could fall below the minimum 1.50.

The possibility of a turn decreases if he price closes above 1.6409.

The pair is fixed above 1.62. In fact, it has formed a shooting star on Tuesday, which of course is a bearish sign. And on Wednesday began to fall which, however did not continue. Looking at the big picture, you can see that this is just a symptom of the massive indecision and not necessarily a strong downtrend.

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

If the price breaks 1.6160 it may go to the level of support 1.6140, which in its turn opens the way to 1.6100 - 1.6050. If the price does not stop at 1.6060 it will go to 1.6000.