13, July 2016

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

The news that Theresa May may become the next Prime Minister supported the pound. This news lowered the political uncertainty which followed the Brexit. However, the pound remained under pressure expecting the possible rate hike this Thursday.

Current situation

The British pound recovered and bounced from the post-Brexit 31-year low at 1.2790. The instrument reached the fresh 1-week high at 1.3300 during the course of the day. The pair gained more than 250 pips throughout the day and left the resistance 1.3100 behind. However, technically, the GBP remained under bearish pressure. The resistance is at 1.3300, the support comes in at 1.3100.

MACD crossed the zero line upwards and moved to the positive zone that indicates the buyers’ strength. RSI is above 70 and is overbought which also supports buyers. If the oscillator remains in the overbought area, it will strengthen the bulls’ positions.

The pound broke the 50-EMA and approached the 100-EMA in the 4 hours chart. The 1 hour chart showed that the instrument broke the 50, 100 EMAs and headed higher and already above the 200 EMA.

Trading recommendations

In the potential scenario, the next stop for the GBP/USD could well be around 1.3500 that acts as a strong resistance for the pound.