25, June 2014

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General overview

The pound rose slightly amid the Bank of England credit conditions survey which had shown an increase in loans demand in the UK companies the second consecutive quarter. The representative of the Bank of England, Miles said that the recovery in the UK had stabilized and the Bank of England should start raising interest rates in the coming months to maintain a strong economy.

From the resistance level 1.7055 the pair bounced back last week. The current decline is not supported by volumes, still it allowed sellers to break below the rising trend line of 1.7020.

The price is finding the first support at 1.7000, the next one is at 1.6940. The price is finding the first resistance at 1.7040, the next one is at 1.7080. There is a confirmed and strong buy signal. The price is above the Cloud and it is above the Chinkou Span. The downward movement will be until the price is under the Kijun-Sen. The MACD histogram is in the positive territory.

Trading recommendations

If sellers do not break below the support, we expect a rebound to 1.7055. The break up 1.7055 will open the way to 1.7100.