09, June 2014

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

There was not anything unexpected for the pound last trading day- the Bank of England left its interest rate unchanged at a minimum 0.5%, while the total amount of retained bond purchase program stayed at 375 billion pounds. This is in line with expectations and the market barely reacted to it. Nevertheless, the British pound rose against the dollar on the day, the impulse to buy sterling for the "dollar" was created by ECB decisions mood, but also enhances the view that the BoE will start tightening policy sooner than expected. The published news has indicated that the "boom" in the Britain housing market continues.

The resistances break 1.6765 was accompanied by a strong pound growth against the U.S. dollar. The growth rates fell straight to the downward trend line 1.6820.

The price is finding the first support at 1.6730, the next one is at 1.6670. The price is finding the first resistance at 1.6800, the next one is at 1.6860.

The price is in the Cloud and above the Chinkou Span. The Kijun-Sen is directed upward. The Cloud is descending. The downward movement will be continued as long the price is in the Cloud.

The MACD histogram is in negative area. The indicator is growing.

Trading recommendations

As long as the trading continues in the descending trend line direction the bearish trend remains relevant. The continued consolidation near the trend can be a good signal for the price bounce down. The potential to the price falling is the next support level 1.6765.