21, October 2016

GBP/USD (a 4-hour chart)

General overview

The pound edged lower on Thursday following worse-than-expected Retail Sales release.

Current situation

 The GBP/USD pair remained near its recent highs, consolidating its gains. The pound traded flat, staying within a tight range between 1.2300 - 1.2260.The prices moved downwards from the upper limit of the range towards its lower boundary during the day. According to the 1 hour chart the price is sandwiched between the 50 and 200 EMAS. All moving averages (50, 100 and 200) are neutral in the same chart. The current resistance is seen at 1.2300, the support lies at 1.2200. 

MACD indicator is at the centerline. If the histogram enters the negative territory, that will indicate sellers’ growing strength. If MACD returns into the positive area the buyers will take control over the market. RSI moved towards the oversold area.

Trading recommendations

The GBP/USD is having difficulties to go any higher. If the pound manages to break above the current resistance it will be able to test the level 1.2400. On the other side, a break below 1.2200 will erase its recent gains and will return sellers in the game.