08, September 2014

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

The British pound also fell against the dollar. The sterling collapse came amid the dollar optimism caused by the ECB decisions. While the British regulator has not changed the main refinancing rate currently at 0.5% and left the bond purchases program in the amount of 375 billion pounds.

The price rapid decrease has led to the 1.6340 downtrend channel lower bound breakthrough. The level break occurred in the context of increased volume which in the longer term indicates the bearish trend continuation.

The price is finding the support at 1.6270. The price is finding the first resistance at 1.6340, the next one is at 1.6440.

There is a confirmed and a strong sell signal. The price is under the Cloud and it is under the Chinkou Span. The Tenkan-sen and the Kijun-sen show a horizontal movement. The downward movement will be until the price is under the Cloud.

The MACD histogram is in a negative territory. The price is consolidating.

Trading recommendations

The potential downtrend target is the support level of 1.6270.