12, March 2014

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The pound was the most vulnerable in the last session – it gave a negative result versus the dollar and other majors. It’s hard to say, what was the reason for selling the pound on a practically empty economic calendar. Perhaps, there were technical factors identified strong resistance levels, which have already held back "bulls" for a long time, and investors decided to adjust positions ahead of important events, such as hearing in the British parliament, which will address issues of inflation and exchange rates.

The first support level is 1.6600, then – 1.6555. The nearest resistance level is 1.6670, higher – 1.6750.
There is a strong sell signal; the pair broke the Cloud down. The price is below the cloud and above the Chinkou Span.

The downward movement will be continued as long the price is below the Kijun-sen. The Cloud is neutral. The Tenkan-Sen is directed down and the Kijun-Sen is horizontal.

Bollinger Bands indicator points to a flat. Its bands are broadening being directed aside.
MACD is in the negative area. The indicator is slowly decreasing

Trading recommendations

The pair’s decrease led to the rising channel and 1.6686 intermediate support level 1.6650 breakdown.
At this point, there is an approach to a strong price support level 1.6600, which projects key support on a buyer’s side. Should the pair break it down we expect a "triple top". The potential targets will be the mark 1.6500, 1.6460.