08, July 2016

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

On Thursday the pound made an attempt to grow from the record lows after a positive Industrial PMI publication. However, investors remained cautious regarding the future of the UK economy that still pressures the pound.

Current situation

The British currency remained inside a short bearish channel. The GBP/USD returned some of its losses during the European session on Thursday. However, the recovery was short-lived and it dropped back to the nearest support 1.2900. The pair is still below the mark 1.30. Investor sentiment towards the pound is still negative. The resistance is at 1.3100, the support comes in at 1.2900.

The EMA50, EMA100 and EMA200 kept decreasing in the 1 hours chart, which is a sell signal. The EMA50 acts as a resistance for the price. MACD is below its centerline, its histogram decreased. RSI remained close to the oversold area. If the oscillator enters the oversold area, it will be a sell signal. The indicators recommend short positions.

Trading recommendations

The pound remains weak as political uncertainty in the UK is still high. The next target for this pair is the support level of 1.2700.