12, November 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The British pound could be called the winner of last week's session. The pound strengthened against the dollar and other majors on the support of good data, represented by the impressive growth of PMI activity in the construction and services sectors. On Friday, the "cable" was down against the dollar amid a very encouraging message on employment in the United States.
If the cross-rate euro/pound will continue to fall, we will see a small strengthening of the pair GBP/USD. The mark 1.6080 will be the nearest growth resistance.

Tenkan-Sen and Kijun- Sen formed a «dead cross», Kijun-Sen is directed downside, other lines are horizontal. Ichimoku cloud is going down, Chinkou is below the chart, the price is inside of the Ichimoku cloud. We expect a short-term resistance from Kijun-Sen with a further decrease of the price.

The downward movement will be continued as long as the Kijun-sen is above the price.

Bollinger Bands confirms the present southern movement, its bands stops narrowing and are directed down.
The MACD histogram is in a negative area, its volumes are increasing.

Trading recommendations

We do not believe that pound will update the minimum of 04.11.2013.
To continue the downward trend the currency needs to break and consolidate below the strong support at 1.5950. Still the retest of 1.5700 is possible.