08, November 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The pound continues to grow on the back of UK industrial output, which rose more than it was expected in September. Industrial output grew by 0.9% compared to the previous month, while manufacturing output up 1.2% - exceeding the expectations of growth of 0.6% and 1.1%, respectively. The house prices in the UK have been growing for 9 months according to Halifax. The housing price index from Halifax rose in October by 0.7%, with annual growth 8.1%.

The pair forecast looks positive and we expect to continue the uptrend and testing resistance in the region about 1.6300-1.6360. In case of break and consolidation above it the growth to the key resistance 1.6750 will be confirmed.

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 stops narrowing and are directed aside.
The MACD histogram is in a positive area, its volumes are growing.

Trading recommendations

We expect consolidation at the level 1.6075. If the price does not get any support after the fundamental data release we expect a rebound down. Mark 1.6082, 1.6037, 1.6002 are the potential targets to fall to.