11, July 2016

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

The pound grew against the dollar on Friday after a strong Trade Balance report. Investors’ concerns regarding the Brexit faded for a while.

Current situation

The pair little changed since the last week. The GBP/USD traded at the support 1.2900 last Friday. The instrument is in the descending channel, at its lower limit. The pound is consolidating after a sharp drop. The resistance is at 1.3100, the support comes in at 1.2900.

MACD is in the negative area that indicates the sellers’ strong positions. RSI rebounded from the oversold area. If the oscillator enters the oversold area, it will be a sell signal. Its growth will weaken the sellers’ positions.

The moving averages (50, 100 and 200) are moving downwards in the 4 hours chart. The pound is at the 50-EMA in the 1 hours chart. The 100-EMA acts as a resistance for the instrument.

Trading recommendations

We preserve a bearish outlook for the pair. After the 1.2900 support break the price may fall to 1.2700. Alternatively, the GBP/USD may recover to 1.3300.