09, April 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

British pound grew against the dollar last week. The fact that the Bank of England did not change the monetary policy and did not go to its softening rather helped the pair to grow. Plus, we had weak economic data from the U.S. that also pushed the pair up.

The British economy continues to struggle with the crisis and speeds up in the second half of the year. According to a survey conducted by BDO LLP the latest news from Europe also improved the mood of business.

The pair continues to trade above the cloud. The buy signal is strong as Chinkou span consolidated above the price and the price is trading above the Cloud. The Tenkan-Sen line is above the Kijun-Sen. Tenkan-Sen is going up, the Kijun-Sen is horizontal. The Cloud is growing.

The pair is consolidating over the cloud. The support level 1.5250 is a crucial now. Should the price break through it the price can enter the cloud, which will weaken the buy signal.

Bollinger Bands extended and directed upward. The indicator indicates the upward movement.

MACD is above a zero line, and does not allow to consider short positions, if it turns down that could become a signal of the completion of the upward correction.

Trading recommendations

The pair is consolidating after last week rising. If the correction continues the pair will grow to the level 1.5460, but not before the pair is fixed at 1.5360.

In case of turn back the pair will move to the level 1.5250. The next support level is 1.5180.