16, July 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The pair continues to work out the "dead cross" on a daily time-frame. Still there is a correction on a 4-hour time-frame. The current sell signal is weak and confirmed, as Chinkou Span is below the price, and the price is in the Ichimoku cloud.

At this point the pair is consolidating in a price range: 1.5070-1.5170. The downward movement is targeted to the support level 1.4890. After passing this target the downward movement may go to the second support level 1.4866.

The downward movement is maintained as long as the price is below the Kijun-Sen if the price consolidates above this line, then a sell signal will be weakened and the further downward movement will be called. The Kijun-Sen and Tenkan-Sen are directed downwards. Both lines are horizontal. The Chinkou Span is below the price that is a confirmation of the current sell signal.

Bollinger Bands show an upward movement, the bands are directed up.
MACD is in a positive area.

Trading Recommendations

The break up in the area 1.4993-1.5001 indicates a limited downside risk. The sharp growth off the last week's three-year low 1.4813 suggests the beginning of a broader recovery. A break above the high 1.5220 last Thursday will return our views to the former maximum 1.5303. There is a need of a clear break below 1.4990-93 to make the minimum of 1.4813 vulnerable.