13, November 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The pair continued falling, sparked by the ECB's decision to lower its key interest rate to 0.25%. On Monday, the price tested the key level 1.5965 several times. Should the pair break it the pair can go to 1.5920 and 1.5880.

Tenkan-Sen and Kijun- Sen formed a «dead cross», Kijun-Sen is directed downside, other lines are horizontal. Ichimoku cloud is going down, Chinkou is below the chart, the price is inside of the Ichimoku cloud. We expect a short-term resistance from Kijun-Sen with a further decrease of the price.

The downward movement will be continued as long as the Kijun-sen is above the price.

The technical indicators confirm the probability of downward movement on the four-hour chart. Bollinger bands are directed downward. MACD histogram crossed the zero line from the top down, its volumes are increasing.

Trading recommendations

We recommend opening short orders with the target 1.5880 should the price break 1.5965. We can go long if the price breaks 1.5985. The target is 1.6040.