18, July 2016

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

The BoE left its rates unchanged, however, the regulator left the door open for changes for August. This news preserved some risk appetite in the markets.

Current situation

The tone is still negative in the market. The pound fell from a two-week high on Friday when the U.S. data boosted the dollar across the market. The pound lost about 1.20% during the course of the day. The current resistance is seen at 1.3300, the support exists at 1.3100.

MACD indicator declined. If the histogram enters the negative territory, that will indicate sellers’ growing strength. Indicator RSI rebounded from the overbought area that supports sellers.

The instrument is locked in-between the bearish 100-EMA and the 50-EMA. The moving averages (50, 100 and 200) direction is downwards.

Trading recommendations

We remain bearish on the outlook for the currency. A move below the current support 1.3100 would suggest a resumption of the bearish trend.