25, October 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The Monetary Policy Committee of the Bank of England voted unanimously in favor of the unchanged political system at its meeting in October.

The minutes showed that the MPC is with slack in the economy, but, in any case, it is eroded faster than everyone expected. This can lead to the achievement of 7% threshold of unemployment before MPC expects and the performance of the private sector in the second quarter was close to trend.

The minutes do not support the view that politicians are willing to raise rates before and probably will keep them for a long period of time.

There is a strong and confirmed buy signal, as the chart is consolidated below Chinkou span, and the Ichimoku cloud is below the price. Tenkan-Sen and Kijun-sen are horizontal. The Cloud is growing.

The upward movement will be kept as long as the Kijun-sen is located at the level 1.6190, being below the price.

Bollinger Bands shows a lateral signal, its bands are horizontal.
The MACD histogram is in a positive area, reducing its volumes.

Trading recommendations

The height of the right shoulder largely depends on the ability of the price to break through the inclined resistance line 1.6200. If the price does not break the shoulder, then the rebound down to 1.6115 is expected.

If there is an increase in the volume of trades in the approach to the level of 1.6115 it will serve as support for the southern movement.