15, August 2014

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The British pound was the main loser among all majors at yesterday's session. Sterling fell against the dollar, having lost more than 120 points. The cable fell because of the weak reports: the employment grew, but at the same time, salary growth leaves much to be desired - the average wage in the UK in April-June increased by only 0.6% instead of the expected 0.75%.

BoE’s statements poured "fuel to the fire", they say that the interest rates growth will largely depend on the acceleration of wage growth.

Sellers managed to break below the key support level 1.6710 - 1.6700. The downward trend is expected to be continued, but before that we are likely to see a short-term pullback to the resistance level 1.6700 - 1.6710.

The price is finding the first support at 1.6640, the next one is at 1.6570. The price is finding the first resistance at 1.6700, the next one is at 1.6770.

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

The MACD histogram is in a negative territory.

Trading recommendations

The pair tends to decrease. The potential target is 1.6640.