25, September 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

GBP/USD was traded at the area 1.6026 yesterday. Before the announcing the results of U.S. consumer confidence and housing data in the UK, the pair could reach its 8-month high. The price drawing lower highs and lower lows on the intra-day time-frames, sliding down the on the trend line that began last Thursday after reaching a peak after Fed FOMC statement that day.

Pound continues to be traded around the 8-month peak. After the bulls lost in the area of 1.61, the pair is trying to consolidate above the 1.60 area. It is assumed that the pair will be trading between the support 1.5961, 1.5936, 1.5878 and resistance 1.6066, 1.6116. The trend on the one-hour time-frame is quite neutral.

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.

Trading Recommendations

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.