23, October 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The September data will be released after a two-week delay caused by the USA government closing. Should there have not happened the political crisis these economic data could have been one of the key indicators to assess the Federal Reserve when to narrow its bond purchases. But now, economists are concerned how accurate is the data due to the partial closure of the government.

We wait for a significant change in the American politics and the main risk trends may increase the volatility and a swing for the pair. However, it will be hard to impact the sterling with any risky steps and data.

The volumes of a corrective falling does not show the strength of the bearish sentiment, which could serve as a signal for a possible bounce up, returning the price to the resistance level 1.6270. After breaking through this level up, the price will return to the upper limit of the downward channel 1.6200.

There is a strong and confirmed buy signal, as the chart is consolidated below Chinkou span, and the Ichimoku cloud is above the price.

The upward movement will be presumed until the Kijun-sen is located at the level 1.6075, being below the price.

Bollinger Bands are widening, showing a buy signal.
The MACD histogram is growing.

Trading recommendations

The rebound from the 1.6170 support level allowed the price to return to a strong resistance level 1.6270 for the second time since the beginning of the month. We expect a consolidation before the price continues its growing.