07, April 2014

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The British pound was marked by sharp multi-directional movements at Friday’s session. The pound was support by the Bank of England head, M.Karni’s statements that he did not exclude rates increasing before the next spring elections. This news tossed the “cable” up at all fronts. However the emotions did not last long, the U.K. economic data, which indicated a service sector activity slowdown for the fifth consecutive month and the information from the ECB which caused an overall market reaction “to the dollar”, pressured the British currency and forced to return all its conquests to the dollar and the yen.

The continued price consolidation at the resistance level 1.6600 was the signal for the price rebound down. The reducing of the British pound versus the U.S. dollar was going at increased volume, but very few sellers could get to the next support level 1.6555.

The first support is 1.6555, the next one is 1.6500. The resistance is at 1.6600.

There is a strong and confirmed buy signal. The price is above the Cloud and above the Chinkou Span.

The upward movement will be continued as long the price is above the Kijun-Sen. The Cloud is turning upwards. The Tenkan-Sen and the Kijun-Sen are horizontal.

MACD histogram is still in a positive area, it merged with its signal line, it does not currently show clear signals.

Trading recommendations

The pair is descending. The first target is 1.6555. The second target is 16500.