13, October 2016

GBP/USD (a 4-hour chart)

General overview

The GBP/USD was able to strengthen when Theresa May’s (the UK PM) allowed the Parliament to vote on her plans to Brexit.

Current situation

After a short-lived recovery during the Asian session the pound returned to a sell-off being unable to reclaim 1.2300. The level 1.2300 rejected the price downwards. The GBP/USD broke 1.2200 and moved lower towards 1.2100. The 50, 100 and 200 EMAs accelerated their decline. The current resistance is seen at 1.2200, the support lies at 1.2100. 

The MACD histogram decreased which indicates the sellers’ strength. RSI indicator is holding near the oversold levels.

Trading recommendations

A bearish tone prevailed in the 4 hours chart. We will sell the GBP/USD until it stays below 1.2470. A daily close above this level will indicate that the current bearish phase is over.