GBP/USD (a 4-hour chart)
The GBPUSD rate on February 7th is fixed below the Ichimoku cloud. We expect that a downward movement will continue to go to the first and second level of support.
The current signal to sell is confirmed and strong as the Chinkou Span is below the price chart and the price is below the Ichimoku cloud. For this moment the goal of the downward movement is the first level of support 1,5667 which is almost worked-out.
If the price overcomes the target, a downward movement can be resumed to the second support level 1,5590.
The downward movement will have power as long as the price is below Kidjun-sen (1,5762). If the price consolidates above this level the sell signal will be weakened, the downward movement can commence and the price will form “a golden cross”.
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 see that short positions are more relevant now.
MACD is turned down that indicates a downward movement; the turn of this indicator may become a signal for a new turn of the downward movement. If the price rebounds from level 1,5667 that can provoke a correction.
We advise to go short with the goal 1,5590. When overcoming this target the goal becomes – 1,5462.
Stop-loss we place above 1,5755 and if this price goes down you can move the stop loss after it.
When we get profit of 50 - 60 points stop-loss can be moved to a breakeven. You can also close your orders manually if MACD goes up or the price pullbacks from the support level 1.5667.
Our recommendation is to place Take Profit slightly above the target levels – 1.5590 and 1.5462.