05, October 2016

GBP/USD (a 4-hour chart)

General overview

The pound hit 31-year low against the dollar despite positive U.K. Construction PMI on hard Brexit fears.

Current situation

 The GBP/USD maintained its negative tone in the market. The pound dipped lower and refreshed three-decade lows. The sterling broke the support level 1.2800 and declined further, approaching the next level – 1.2700. In the 4 hours chart, the 50, 100 and 200 EMAs extended their decline. The current resistance is seen at 1.2800, the support exists at 1.2700. 

MACD is in the negative area. MACD decreased which confirms the strength of sellers. RSI is in the oversold area.

Trading recommendations

Bears have the ball now. We are looking for the current support break and then continuation of a fall with a further target at 1.2600. The price may correct towards the 1.2850 region. After rolling back sellers may try again to break the immediate barrier.