GBP/USD (a 4-hour chart)
The GBP currency on February 13 formed a new «golden cross» and fixed below the Ichimoku cloud.
The current sell signal is confirmed and strong as the Chinkou Span is below the price chart and the price is below the cloud of Ichimoku.
The goal of the downward movement is the first level of support 1.5590. The price tested it yesterday and bounced back to the level 1.5667. If the price continues the downward movement it shall return to the level 1.5590. If the price overcomes this target, a downward movement will be continued to the second target – 1.5462. Still this movement will be available only after price consolidations below 1.5667 which has been tested but has not overcome yet.
The downward movement will have power as long as the price is below the Kidjun-sen (1.5714). If the price goes up below this critical line, a sell signal will be weakened. Should that happen a correction may be started.
Bollinger Bands shows the aside movement. The market is uncertain a correction may begin any moment. Still we believe that short orders are more relevant on the market now.
MACD is turned down that confirms short orders. When the indicator goes up that will be a signal of a correctional movement. If the price fixes in or below the Ichimoku cloud, it also can become a signal for the correction.
We advise to go short with the first goal 1.5590. If the price overcomes this target the next goal is 1.5462.
It’s recommended to place the stop loss above 1.5733 and if this line goes down we also move the stop loss after it.
When we get profit of 50 - 60 points, stop-loss can be moved to a breakeven. It’s possible to close orders manually if MACD continues going down or price fixes inside or below the cloud. Take Profit is placed slightly above the target levels at 1.5580 and 1.5480.