21, March 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

The pair continued to grow yesterday.

The pair is above the cloud. We have a strong and confirmed buy signal. Tenkan-Sen line is above the Kijun-Sen, both lines are directed upward, the cloud has an upward formation.

If the price returns under the cloud, under the Kijun-Sen and Chinkou Span, the southern movement resumes to the first support level –1.5065.

Bollinger midline is turned in a horizontal plane. The price range formed a flat channel and is not narrowing any more.

MACD began to go down; its histogram is above the signal line. We recommend opening short positions in the short and very short-term.

Trading recommendations

According to the indicators the correction is over. Bollinger shows a low volatility, MACD is going down.

It is possible that the pair to be in a correction in the nearest future. The pound positions do not look firm.

In the case of growth the pair will move to the level 1.5180, after consolidation at it the pair will continue to grow to 1.5250.

Pound can return to the downward movement if MACD turns down.

The first target of the downward movement will be the level 1.4940. Should the pair break through this level and fix below it the pound will go to 1.4800.

Besides technical analysis be advised to consider the fundamental news as well when you make a decision.