29, January 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

GBP/USD still shows the signal to sell. The price is fixed below the first support level after working out the level 1.5667. The current sell signal is confirmed and strong as Chinkou Span entrenched below the price chart and the price is below the Ichimoku cloud.

At this point the target of the downward movement is the second support level (1.5667) which the price has already worked out but has not overcame. When passing it the price may go ahead to the third level of support – 1.5587.

The downward movement will maintain its force as long as the price is below the Kijun-sen (1.5785). If the price fixes above this line the sell signal will become weak and the movement will be able to proceed to the bottom of the Ichimoku cloud. Chinkou Span is below the price chart that confirms the current sell signal showing bearish mood of the currency pair.

Bollinger Bands continue to downward, the bands once again expanded and directed downward. We recommend opening only short positions now.

MACD is pointing down, indicating a continuation of the downward movement, if the indicator changes the direction of the rising it could give signal for the beginning of a new round of upward correction. Rebound from 1.5667 level can also trigger (or have already provoked) beginning of the corrective movement.

Trading recommendations

It is now advised to consider short positions to 1.5667 target. If the price successfully passes this target it will go for the level 1.5587. Stop-loss should be placed above 1.5785 and with the lowering of the line should be moved down.

When gaining profit of 50 - 60 points we recommend to place you stop-loss in breakeven. You can always close orders manually if MACD turns up or the price bounces from the level of 1.5667.

Take-profit can be placed just above the target levels – 1.5675 and 1.5595.