27, November 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The pound markedly fell on Monday after the release of weak data for the UK housing market. British Bankers' Association BBA Mortgage Approvals, the number of approved applications for mortgages fell in October to 42.8 thousands from nearly 4 – years lasting maximum of 43.2 thousands in September - while the expected increase of approved applications was 45 thousands. Euro also was able to decrease as had the negative impact from some statements of the ECB representatives.

Tenkan-Sen and Kijun- Sen has fromed a «golden cross», Kijun-Sen is directed upwards, Tenkan-Sen is directed up as well. Ichimoku cloud has changed its direction, Chinkou is below the chart, the price is above the Ichimoku cloud. The upward movement will be continued as long as the Kijun-sen is below the price.

Bollinger bands are widening, directed upwards. MACD histogram crossed the zero line from the down up, its volumes are decreasing.

Trading recommendations

Decline of the pound came to a firm enough resistance level 1.6140, where can see a consolidation. Such active drop was not supported by the volume; therefore, the probability of a rebound from the support level 1.6140 up is very high. A signal confirming the rebound will be prolonged by the consolidation. The daily resistance level 1.6230 will serve as the potential target of a bounce up.