13, May 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

The Bank of England left interest rates unchanged - 0.5%, as it was expected. They also left unchanged the volume incentive program at 375 billion pounds.

The next news the most expected is a quarterly report, which will be released on May 15, and then the meeting report, published on May 22. The industrial production grew for the last time, the results were better than expected. The pound fell, but remained in the price range 1.54-1.56 against the U.S. dollar.

Late last week the pair lost about 170 points, however, the northern movement continues. An important support level is around 1.5370-55 and if this psychologically important level is broken down, we can expect a change to the downward trend.

Last week, the pair managed to develop a downward motion and entered the cloud, having broken it at the end of the trading week on Friday.

Chinkou Span is below the price showing a bearish mood of traders. Tenkan-Sen line is below the Kijun-Sen. Tenkan-Sen and Kijun-Sen are directed sideways. The Cloud is going down.

Bollinger Bands show a downward movement, the bands widen and directed downwards.
MACD began to fall.

Trading recommendations

In the short-term as s resistance stands 1.5550 level limiting a potential growth.
If the downward movement continues, the pair will move towards 1.5300. If this level is broken the pair GBP/USD will direct to 1. 5250, the lower boundary of the Ichimoku cloud.

If the pair goes up, the price will go to 1.5535, having consolidated at this level, GBPUSD will go to 1.5570.