27, May 2014

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The pound is trading to the rising trend line 1.6780 which has been a reliable support for buyers for seven months.

The pound was correcting the most part of the May, still the price is still directed upwards in the medium-term. We expect the uptrend line 1.6780 retest in the short term. It should be noted that the volume gradually decrease near the bottom, forming a divergence.

The price is finding the first support at 1.6800, the next one is at 1.6730. The price is finding the first resistance at 1.6860, the next one is at 1.6940.

The price is in the Cloud and above the Chinkou Span. The downward movement will be continued as long the price is under the Kijun-Sen.

The MACD histogram is in positive territory.

Trading recommendations

If the pair retests the rising trend line 1.6780 we may expect a consolidation with a price bounce up with the continuation of the uptrend. The potential growth targets are the marks 1.6900, 1.6990.