13, June 2014

GBP/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General overview

The British pound became the leader at yesterday's session - generally it strengthened against its major opponents. The pound buying impulse was received from the news about the economic situation in Britain, which showed an improvement in the labor market and strengthened investors' confidence on the fact that the Bank of England will have to start tightening policy at an earlier date than it was expected.

In addition, with the help of some positive fundamental data the buyers could break above the resistance level 1.6830. This level break opened the way for the descending trend line 1.6850 retest in the short term.

The price came to the downward trend line at the small volumes. We believe it will be hard for it to break it with such low volume power.

The price is finding the first support at 1.6800, the next one is at 1.6730. The price is finding the first resistance at 1.6860, the next one is at 1.6940.

The price is above the Cloud and above the Chinkou Span. The Kijun-Sen is directed upward. The Cloud is growing. The upward movement will be continued as long the price is above the Cloud.

The MACD histogram is in a positive area. The indicator is growing.

Trading recommendations

The trend line retest should most likely lead to a price bounce down. The bounce potential targets are the two support levels: 1.6770 and 1.6730.