GBP/USD (a 4-hour chart)
The British pound has fallen against the US dollar. Obviously, the market shifts our expectations, concerning the first rate increase by the Bank of England to the middle of 2015, until recently, we expected the policy tightening at the end of the year. Apparently, such sentiment is improving due to the Bank of England omission, based on a series of the UK economic indicators, indicating a slowdown and fears for the processes in the overall Eurozone economy.
The British pound has been trading in the downward trend line direction four months in a row. Short-term tests were followed by a trend line bounce rates down with the further bearish trend continuation.
At the moment buyers tried again to correct the price to the trend line of 1.6180. The trading volumes did not support just formed correction. Apparently, the downward trend line retest of 1.6180 will lead to another price rebound downwards.
The price is finding the first support at 1.6030, the next one is at 1.5950. The price is finding the first resistance at 1.6100, the next one is at 1.6180.
There is a non-confirmed and a weak sell signal. The price is on the Cloud and it is under the Chinkou Span. The Tenkan-sen and the Kijun-sen show a horizontal movement and form a “Dead Cross”. The downward movement will be until the price is under the Cloud.
The MACD histogram is in a neutral territory. The price is decreasing.
The potential rebound target will be the current month low - the support level of 1.5950.