28, November 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The pound continues trading upwards. In November GBP/USD added 345 points and is on its way to the last line of defense as a strong resistance level 1.6258. When approaching this level the strength of the uptrend is likely to weaken, we expect a technical correction or change in the trend.

Despite the gradual recovery of the British economy, the fundamental data this week is not in favor of the pound. Thus, the volume of consumer credit in October fell to 940 million pounds. The rapid decline is one of the signs of slowdown in economic activity. But data on mortgage lending contrary show a positive trend, the October index value reached 9.9 billion pounds - a record high since 2009.

The nearest resistance level is a recent high 1.6230. The next strong resistance is the level 1.6258. The pair will meet support at the level 1.6131.

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

There is a high probability of a rebound from 1.6232. The volumes of an upward movement are weak, we see a forming divergence. The British currency may fail to break above 1.6232, the target for a rebound is the level 1.6102.