08, October 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The pair slightly rebounded after closing at 1.6009 last week.

As it was expected, the protection is at 1.6000, but it seems that the level will have difficult time at the beginning of the week, given the dynamics of quite a sharp decline. We expect there will be an upward trend to supports 1.5965 and below 1.5915.

The current buy signal is strong and confirmed, as Chinkou Span is above the price and the price broke the Ichimoku cloud. The Kijun -Sen and Tenkan -Sen are crossed in a "golden cross" on a daily chart. Both trend lines are growing parallel to each other. The cloud is growing.

Bollinger Bands show a continuation of the downward movement, the bands widen and are directed down. Short positions are recommended now. MACD is directed downward, indicating the current downward price movement.

Trading Recommendations

It is likely that having entrenched below the resistance level1.6050; the price will not be able to break it up for upward correction today. The consolidation near 1.6050 may serve as an exception, after which there will be the downward trend continued until the next support level 1.5950.

If the price falling does not stop at the support level 1.5950, there will be a rising trend line retest 1.5920.