24, October 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The British pound was being traded higher against the U.S. dollar on the back of strong public finances. Net borrowing in September was amounted to only 11.1 billion, compared to 12.5 billion of the previous month. High growth and higher tax revenues help to restore budgetary finance in the UK, and if this trend continues, the Chancellor will not have problems meeting his goals to reduce the deficit.

GBP/USD broke through a strong resistance, having set a three-week record.

The pair moved into the upper corridor between support 1.6225 (maximum 18 of October), 1.6168 (Oct. 16 high) and 1.6277 resistance (maximum of 20 December 2012) to 1.63 (maximum of 16 December 2012).

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 as long as the Kijun-sen is located at the level 1.6190, being below the price.

Bollinger Bands shows a buy signal.
The MACD histogram is in a positive area, reducing its volumes.

Trading recommendations

Before going in a northern direction, the pair should break through and consolidate above the current resistance level 1.6240.

If the price breaks this level we may expect the continuation of a growth to the weekly support level 1.6270 with a possible retest of 1.6300 and 1.6340.