06, May 2015

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

Markit Economics published the construction sector business activity release. If the trade balance release does not cause the strong market reaction as the March report and the March data that include the GDP indicator for the first quarter, the ISM services sector business activity report can be a signal for the British pound mid-term correction completion in the case of positive data. The US dollar will be under pressure.

The pound correction has moved into the long-term consolidation framework above the mark of 1.5100. The formed consolidation is amid the low volumes that is a signal for the reversal upwards. The pair increased and tested the resistance level of 1.5200.

The price is finding the first support at 1.5100, the next one is 1.5015. The price is finding the first resistance at 1.5200, the next one is at 1.5300.

The price is in the Cloud and it is above the Chinkou Span. The Tenkan-sen shows an upward movement and the Kijun-sen shows a horizontal movement.

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

Trading recommendations

The approach to the level of 1.5200 may lead to a price rebound down. The potential rebound target is the support level of 1.5015.