13, April 2016

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

The consumer price index in Britain rose by 0.5% y/y. According to Mark Carney (the Bank of England Governor) they need to accelerate the pace of wage growth and take the inflation to the target level of 2% before any rate increase. We believe that the Bank of England will keep the rates unchanged until the referendum in June. Uncertainty about the referendum results will slow down the economic growth for the next few months.

The price is finding the first support at 1.4240, the next one is at 1.4160. The price is finding the first resistance at 1.4320, the next one is at 1.4400.

The price is on the Ichimoku Cloud and it is under the Chinkou Span. The Tenkan-sen and the Kijun-sen show an upward movement forming a “Golden Cross”.

The MACD indicator is in a positive territory. The price is increasing.

Trading recommendations

If the price fixates below the support 1.4240, it may continue the downward trend in the short term. The potential target is 1.4160.