06, October 2014

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

The pound continued its decline and set a new three weeks low, despite the strong data about the Britain construction sector. The UK construction sector business activity index exceeded forecasts in September and increased up to 64.2, while it had expected the rise to 63.5. However, the pound fell after the Broadbent’s statement, the Bank of England representative that the UK is not still ready to raise the interest rates.

The British pound continues to stay in the downward channel. The bears have broken the support level of 1.6030 and were fixed below this level.

The price is finding the first support at 1.5950, the next one is at 1.5870. The price is finding the first resistance at 1.6030, the next one is at 1.6100.

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 downward movement and the Kijun-sen shows a horizontal movement. The downward movement will be until the price is under the Cloud.

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

Trading recommendations

We expect the 1.5950 line break that will open the way for the sellers to 1.5870.