06, August 2014

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

The British pound became the leader, after it got stronger against the dollar, but also against the euro and the yen. The sterling was supported by the construction sector activity - the PMI index for this economy sector in July fell slightly to 62.4 from 62.6 previously, but was stronger than it was forecast, waited falling to 62.1.

Before the BoE's meeting the market is not likely to risk much to build positions so the pound growth, even if it happens will not be strong and long.

The price is finding the first support at 1.6860, the next one is at 1.6770. The price is finding the first resistance at 1.6900, the next one is at 1.6950.

There is a confirmed and a strong sell signal. The price is under the Cloud and it is under the Chinkou Span. The Tenkan-sen shows a horizontal movement and the Kijun-sen shows a downward movement. The downward movement will be until the price is under the Cloud.

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

Trading recommendations

The 1.6900 mark retest is likely to happen during the GBP fundamental data release. If the retest is false, we expect the downward trend continuation. The nearest target is the support level of 1.6770.