29, January 2014

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

The pound rose versus the dollar and neglected the most part of its losses on Friday. Any economic data of the “Islands” were not published on Monday and the market probably began to implement the first part of the principle “buy the rumor, sell the fact.

The pair grew to the resistance 1.6620, however to break to the key resistance 1.6750 it needs to consolidate above the given level. This resistance overcoming is still possible, and it will aim the pair to another important resistance 1.7040.

The northern movement is almost canceled after the pair decreased. The price is above the cloud and below the Chinkou Span.

The downward movement will be in a force as long the price is below the Kijun -sen. Tenkan-Sen is crossing Kijun-sen down.

Bollinger bands is broadening and directed aside.
The MACD histogram is in a positive zone, showing a decrease.

Trading recommendations

The first bounce to the resistance level 1.6640 was accompanied by an increased volume. The reverse approach to the level on diminishing volumes is fraught with another bounce, which can be a turning point for a long uptrend.

The retest of the level with the update of the last week’s maximum is likely to happen. But if the price is back to the level 1.6640, a rebound downward with a support of the resistance level 1.6450 may be expected.