05, August 2016

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

The sterling showed a sharp drop for the first time after the Brexit referendum following the BoE’s decision to cut the basis rate by 0.25% and to launch the bond buying program.

Current situation

The pound had a negative day on Thursday. The GBP/USD had a sharp drop to the support 1.3100 area where the downward impulse faded. The Sterling lost about 1.60% during the course of the day. The current resistance is seen at 1.3300, the support exists at 1.3100.

MACD shows a divergence which points to the trend change. RSI approached the oversold territory.

The instrument bounced from the 200-EMA and fell in the 4 hours chart. The pair broke the 100 and 50 Day EMAs on its way. Now the price is below the moving averages which act as a resistance.

Trading recommendations

We are looking for the 1.3100 support break and then continuation of a fall with a further target at 1.2900.