11, June 2014

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

The British pound spent yesterday's trading decreasing in a narrow price range against the dollar. There were not interesting news and we can only mention the International Monetary Fund report which has shown an increased concern about the UK housing market where there is a strong price growth and as it was indicated this is the typical bubble sign.

The downward trend line and resistance level 1.6835 retest led to the three days consolidation that is on right now.

The trading volumes near the downward trend line 1.6830 formed a divergence indicating the buyers’ power lowering.

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 a positive area. The indicator is descending.

Trading recommendations

The trend retest is more likely to lead to the price bounce down to the further downtrend continuation.
The main price reduction targets are the two support levels: 1.6730 and 1.6700.