16, September 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

GBP/USD continues to find buyers on dips, holding around the level 1.5800. The hour chart is in a neutral position, while the indicators started correcting an extreme overbought on the 4-hour chart and targeted to the south, offering a respite for the bull trend that we have seen the last few weeks. While the pair holds above 1.5750 supports, a corrective downward movement is expected to be short-lived.

The price broke the Cloud and consolidated above it. The Kijun -Sen and Tenkan -Sen are crossed in a "golden cross" on a daily chart. Both trend lines are growing parallel to each other. The 4 hour time frame is much the same. The price is above the Cloud being traded above its upper boundary. The cloud is growing.

Bollinger Bands shows an upward movement.
The MACD histogram left the negative zone and is growing.

Trading Recommendations

The intermediate rising trend line 1.5580 is broken. The support line 1.5780 is tested for strength, a break of which would mean a return to the support 1.5740, then we believe the pair will move to 1.5700.