09, November 2016

GBP/USD (a 4-hour chart)

General overview

The pound showed mixed trades on Tuesday, growing on the back of better-then-expected Manufacturing Production report the first part of the day and weakened amid a stronger dollar later the day.

Current situation

Technically, the sterling remained under pressure on Tuesday, trading in a narrow range. After an Asian flat the GBP/USD tried to rally. The price jumped from 1.2400 to 1.2436 where a bullish spike faded and the pound slightly rolled back. The pair got under selling pressure ahead of the NY open and moved below 1.2400. The 4 hours chart showed that the price struggled with a neutral 200-EMA which limits its further gains. A failure here sent the market downside. The 50-EMA is crossing the 100-EMA in the same chart, both moving lines are neutral. The current resistance is seen at 1.2400, the support is at 1.2300.

MACD decreased which indicates the buyers’ positions weakening. RSI is consolidating within positive territory.

Trading recommendations

We preserve a negative outlook for the GBP/USD pair. A close below 1.2400 may trigger losses towards 1.2300.