22, July 2014

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)


Obviously, the reason for the sales drop was a sterling risk appetite against the backdrop of the geopolitical upheaval. The British currency is still the most profitable among the other majors in the current situation and it was the investors’ natural desire to reduce risk positions. The false retest of the resistance level of 1.7115 led to the formation of a price’s short-term pullback down. The British pound short-term pullback against the U.S. dollar has not appeared long.

The price is finding the first support at 1.7050, the next one is at 1.7000. The price is finding the first resistance at 1.7115, the next one is at 1.7160.

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 show a horizontal movement and form a “Dead cross”. The downward movement will be until the price is under the Cloud.

The MACD histogram is in a negative territory. The price is decreasing.

Trading recommendations

The approach to the level of 1.7050 may lead to a price rebound up. The potential rebound target is the level of resistance 1.7160.