GBP/USD (a 4-hour chart)
Services sphere makes more than three quarters of the UK GDP, and the growth of this indicator strengthens the confidence that the economy continues to grow in the current quarter.
We expect the third estimate of economic growth for the 2nd quarter this week. We do not expect any change of a direction, but some details may shed light to investors to tell how stable the recovery is.
The current buy signal - strong and confirmed, as Chinkou Span is above the price, and the price broke the Ichimoku cloud. The Kijun -Sen and Tenkan -Sen are crossed in a "golden cross" on a daily chart. Both trend lines are growing parallel to each other. The cloud is growing.
Bollinger Bands shows an upward movement, its bands are narrowing. The volatility is being decreased. We can expect a flat or a correction.
The MACD histogram is in a positive area but it is ascending.
If this price continues to fall we believe it can go further and we can expect the formation of a deeper correction down. The potential levels are 1.5900, 1.5820
Should the price break the resistance 1.6060 upward it may continue the bullish trend. In this case, the potential targets will be two resistance levels: 1.6100 and 1.6140.