14, July 2015

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

The last week the May UK positive trade balance release allow us to count on the economic growth acceleration in the second quarter which may support the demand for the British currency. Britain and the United States did not publish important macroeconomic statistics. In this regard, attention should be paid to the debt market dynamics.

The three-day upward correction having formed from the support level of 1.5390 enabled buyers to break the level of 1.5550. There was a price rebound downwards from this level.

The price is finding the first support at 1.5460, the next one is 1.5390. The price is finding the first resistance at 1.5550, the next one is 1.5670.

There is a confirmed and a strong sell signal. The price is under the Cloud and it is under the Chinkou Span. The Tenkan-sen shows an upward movement and the Kijun-sen shows a downward movement. The downward movement will be until the price is under the Cloud.

The MACD histogram is in a neutral territory. The price is decreasing.

Trading recommendations

We expect the 1.5550 line break that will open the way for the buyers to 1.5670, further then towards 1.5775.