18, August 2014

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The British pound continued falling against the dollar. Obviously, the inflation report and M.Karni’s performance were the main drivers for the pair. After these events the market concluded that the key rate would remain low much longer than expected. To return some loss the pound could after the weak State's economy data release and due to technical levels which showed a strong support.

The second part of the previous week the pair spent in a consolidation at the support level 1.6675. The bounce upwards from this level was not supported by volumes. The current trend remains bearish.

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 level 1.6675 break will allow sellers to reach the support level located at the level of 1.6570.