10, October 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The market once again checked the strength of the resistance of the breached previous support at 1.6070/80. Another attempt to climb up again failed, to consolidate above the "bulls" failed and now the price returned back down, is at around 1.5950.

According to indicators we shall sell the pound. The chances of the pair to test the trend line grow every hour. The break of the same obstacles will confirm the bearish potential and a high probability of lower prices for the next strong support, which is limited in the range of levels of 1.5880/90 - 1.5820/30.

The price broke the Cloud down having cancelled the buy signal. Chinkou Span is below the price. The Kijun -Sen and Tenkan -Sen are directed down. The cloud is directed down.

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.

Trading Recommendations

The rebound of 1.6050 has led to the exit prices of an intermediate downtrend channel with a further retest of a sloping resistance 1.6120. As the break above the 1.6100 figure failed, the pair has fallen to 1.5950.

If the price breaks this level we can expect its falling to 1.5950.