GBP/USD (a 4-hour chart)
The pound grew on Tuesday, amid growing UK Services PMI, which reached its highest level since May 1997. That is a good sign of strengthening economic recovery at the beginning of the fourth quarter. Services PMI in October rose to 62.5 from 60.3 in September, while we expected a decrease. According to preliminary data, GDP for the third quarter will show the maximum growth rate for 3 years. Economic recovery has been continued since January.
The pair turned around 1.5890 support and renewed a dynamic growth, which increases the likelihood testing the near term resistance around 1.6300-1.6360. Should the pair consolidate above this level we can expect an uptrend to 1.6750 key resistance.
Tenkan and Kijun lines formed a «dead cross», Kijun-Sen is directed downside, other lines are horizontal. Ichimoku cloud is going down, Chinkou is below the chart, the price is inside the Tenkan-Kijun channel. We expecte a short-term resistance from Kijun-Sen with a further decrease of the price.
The downward movement will be continued as long as the Kijun-sen is above the price.
Bollinger Bands confirms the present movement, its bands are narrowing and are directed downwards.
The MACD histogram is in a negative area, its volumes are reducing.
The price is being traded above 1.6080 that may become a firm support in case of a retest to 1.6120 with a possible rollback down. An additional signal, acting in favor of a rebound from the 1.6120 level will be the divergence in the volumes.
It is necessary to consider a possibility of a rebound down. The potential targets are three levels: 1.6080, 1.6050 and 1.6030.