15, May 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

GBPUSD continued the downward movement on Monday, after a sudden falling the pair corrected in the first half of the day, however, in the second half it fell again to the level 1.5280.

The falling did not stop at that and the pair managed to overcome 1.5250 level yesterday.

Waiting for a fundamental support the pair continues going down, the labor market data will be published on Wednesday, the unemployment rate remains unchanged, while the Initial Jobless Claims should be reduced that might give the impulse for growth to the pair.

In addition, Mervyn King, the Governor of the Bank of England will promulgate an inflation report on Wednesday.

The pair is consolidated between the levels 1.5280-1.5190. We expect the strengthening of the pair to the resistance level 1.5370 (1.5410). In the future the British pound will continue its upward trend against the dollar, but with less dynamic. The expected values are: 1.5410, 1.5310, 1.5450.

Chinkou Span is below the price that is bearish signal. Tenkan-Sen is below the Kijun-Sen. Tenkan-Sen and Kijun-Sen are directed downward. The Cloud has a downward formation.

Bollinger Bands show a downward movement, the bands are widened and going downward.

On the daily chart MACD is in a positive area below the signal line showing a correction movement.

Trading recommendations

We advise to go long with take-profit at 1.5450 (1.5480). For the medium term, it is recommended to take profit at 1.5600.

We cannot exclude breaking the resistance level and further falling. Should that scenario happen we recommend to go short with the first target 1.5190 and the second one 1.5080.