05, August 2014

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The GBP/USD the long uptrend turned down. The British pound actively decreased against the U.S. dollar for almost a month. The rebound from the resistance level of 1.7160 was followed by the price’s sharp falling and the two critical supports breakdown. The last week has allowed the sellers to strengthen their position due to the strong support level of 1.6950 breakthroughs and the rising trendline 1.6900. The two strong supports break came amid an increased volume. In the longer term, this means a continued downward trend.

The price is finding the first support at 1.6825, the next one is at 1.6770. The price is finding the first resistance at 1.6860, the next one is at 1.6900.

There is a confirmed and a strong sell signal. The price is under the Cloud and it is under the Chinkou Span. The Tenkan-sen and the Kijun-sen show a downward movement. The downward movement will be until the price is under the Cloud.

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

Trading recommendations

Currently, the price is trading above the resistance level 1.6825 which has already become the support. We recommend going short with the first target - 1.6770. When the price consolidates below the first target it may go to the level of 0.6700.