21, January 2014

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The pound grew on Friday after a strong report on retail sales and returned a large part of the week’s losses. British retail sales in December showed the highest monthly growth since February 2010 (+2,6%), having exceeded the expectations of growth by 0.4%. In annual terms sales grew by 5.3%, which was the best result since October 2004. The growth of the retail sales by the end of 2013 was the most significant in nine years.

The northern movement is canceled after the pair broke the cloud downwards. The price is below the cloud and above the Chinkou Span.

The downward movement will be in a force as long the price is below the Kijun -sen. Kijun-sen and Tenkan-Sen are directed down. Tenkan-Sen is crossing Kijun-sen downwards.

Bollinger bands indicator is broadening and directed downwards.
The MACD histogram is in a negative zone, showing a decrease.

Trading recommendations

The rebound from the strong support level 1.6230 led to a retest of the downtrend line 1.6450. A prolonged consolidation in the area 1.6450 is a reversal signal. The potential target of this spread will be the repeatedly tested support level 1.6230.