06, January 2014

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The pound also fell versus the “buck” last week. The reason for the disorders on the pound could be all the same events on stock markets, as well as the economy data that showed the activity decrease in the UK production.

The pair turned down at the minor resistance 1.6620 and began a correction. We believe pair would probably continue this direction testing the support 1.6155–1.6275.

The northern movement is confirmed and strong. The price is fixed above the cloud and below the line Chinkou Span.

The upward movement will be in a force as long the price is above the Kijun -sen. Kijun -sen is horizontal, Tenkan-Sen is directed downwards. Tenkan-Sen is crossing Kijun –sen down.

Bollinger bands indicator is turning down.
The current downward movement is confirmed and by MACD histogram.

Trading recommendations

The pound fell at a rapid pace and reached fresh highs at the level 1.6577.
The loss of support at the level 1.6456 is an alarming signal for the “bulls”, but while the pair is above the support 1.6400, they have nothing to worry about. This level will open the way to 1.6313.