15, February 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

Ichimoku Cloud Analysis on GBP /USD shows us that the price has formed a "dead cross". We can see that the Tenkan-Sen and the Kijun-Sen intersected below the Cloud. Yesterday the pair continued falling. The pair has worked out 1.5545 level and approaching to 1.5462. Today the pair is to test this level and probably will continue to go down.

The current sell signal is confirmed and strong as the Chinkou Span is fixed above the price chart and the price is far below the Ichimoku cloud.
For this moment the next target might be the level of support 1.5430. Yet the downward movement will be continued only if the price overcomes 1.5462 which has been tested but has not overcome.

Should the price overcome this target it will fall to the next level of support – 1.5430. The downward movement will be actual as long as the price is below the Kidjun-sen (1.5648).

If the price consolidates above this line the sell signal will be weakened; an upward movement can begin and the price can form a “golden cross".

The Chinkou Span is above the price chart that’s a very strong bearish pattern.

Indicator Bollinger Bands shows a downward movement, its bands are wide and going down. While the price is below the Kidjun-sen we expect it to fall down.

MACD is down and indicates a downward movement. If this indicator changes its direction on the upward that can become a signal for a correction. If the price is fixed above level 1.5462, it also can provoke a correction.

Trading recommendations

We advise to go short with the goal 1.5430. If the price overcomes this target the goal becomes – 1.5363. It’s recommended to place the stop loss above 1.5590 and if this line goes down you also can move down the stop loss after it

When we get profit of 50 - 60 points, stop-loss can be moved to a breakeven. It will be possible to open new sell orders if MACD turns downwards or price will fix below level 1.5363. You may place take profits slightly above than target levels.

Besides a technical picture it is also necessary to consider the fundamental news and the time of their release.