05, February 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

On February, 4th the pound has left Ishimoku cloud and fixed below it and Kijun-sen that has provoked a signal to sale – «a dead cross». The current signal to sell is confirmed and strong as Chinkou Span is lower than chart price and the price is below the Ichimoku cloud.

The goal for the downward movement is the first t level of support which is 1.5667. In case of overcoming this target, a downward movement can proceed to the second level of support 1,5590. The downward movement will have power as long as the price is below Kidzhun-sen (1,5788) if the price is fixed above this line the sell signal will be weakened and an upward movement can be started. The Chinkou Span is below the price chart that is confirmation of a current sell signal and a bearish mood of traders.

Bollinger Bands shows the beginning of a downward movement, bands are extended and directed downwards. It is recommended to consider only short positions in the market.

MACD is turned down confirming a downward movement. If the indicator changes its direction on upward, it can become a signal for an upward correction. The rebound from the level 1,5733 can also provoke the beginning of an upward correctional movement.

Trading recommendations

It is recommended to go short for the goal – 1,5667. Should the price overcomes this target our next goal is 1,5590 . Stop-loss is recommended to place above 1,5790 and if this line goes down you can move the stop loss after it.  

To close manually orders on sale will be possible if MACD turns up or if the price rebounds from the level 1,5733. Take-profit can be set slightly above target levels – 1,5667 and 1,5590.