06, February 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

The pair has left the Ishimoku cloud and headed downward. We believe that the correction is over and the pair has returned to its normal downward trend. The current signal to sell is confirmed and strong as Chinkou Span is above the price chart and the price is below the Ishimoku cloud.

Now the goal of the downward movement is the first support level which is 1,5667. The pair has tested it but has not worked out yet.

If the price overcomes this target, a downward movement will be resumed to the second support level 1,5590.
A downward movement will be on as long as the price is below the Kidjun-sen (1,5762). If the price consolidates above this line the sell signal will be weakened, an upward movement can begin. Still we do not believe in this scenario.

The Chinkou Span is below the price chart that is a confirmation of the current sell signal, indicating a bearish mood of traders.

Bollinger Bands shows the downward movement, the bands are extending and heading downwards. We stand for short positions now.

MACD is down that indicates a downward movement.

Trading recommendations

We recommend to go short with the goal – 1,5590. When overcoming this target the next goal becomes - 1,5462. Stop loss we place above 1,5785 and if this line goes up you can move the stop loss after it.

When we get profit of 50 - 60 points stop-loss can be moved to a breakeven
Take-profit can be set slightly above the target levels - 1,5625 and 1,5555.

Besides a technical picture it is necessary to consider the fundamental analysis when open orders.