07, January 2014

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The British currency also fell versus the dollar at the end of last week. Information about the dynamics of activity in the economy of Britain seems to have begun selling the pair as its results indicated a high probability of PMI growth ending, that has been observed in recent months.

The pair continues its correction in the direction of the support range 1.6160-1.6280. In the future, if it stays above the lower limit of the range we expect a resumption of growth to 1.6620 and testing key resistance 1.6750.
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 and Tenkan-Sen are horizontal. 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

If the range 1.6160-1.6280 is broken, the decline will be continued to the support 1.5850. We do not believe that the price will fall further.

We recommend going short with take-profit in the area 1.6000-1.5860.