27, October 2016

GBP/USD (a 4-hour chart)

General overview

The pound moved higher following the positive Mortgage Approvals release on Wednesday.

Current situation

The pound slightly strengthened against the US dollar on Wednesday. The price rallied from the mark 1.2154 to 1.2245. However, buyers failed to push the price higher during the European hours. The price briefly broke the level 1.2200 and returned below the level ahead of the NY opening. The 50-EMA stopped the growing momentum. The moving averages are pointing lower in the 4 hours chart. The current resistance is seen at 1.2200, the support is at 1.2100.

MACD is in the negative area. MACD remained at the same level which confirms the strength of sellers. RSI is within the overbought area.

Trading recommendations

The inability to move the price higher points to sellers’ presence. A move below 1.2200 will signal the return of sellers who will try to move the GBP/USD lower towards 1.2150.