30, September 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Overview

Mixed U.S. and UK economic data prevent the growth of the UK pound. The British weakened, falling from a key level from 1.6100 to 1.6035. Is the UK economy able to gain traction, while the U.S. economy is stalling? We believe it is not, the relative superiority, which has been recently demonstrated by Britain, will soon come to an end. First, the surprises are not inherently endless, we have them just due to the fact that expectations are shifted upwards. Secondly, and more important, it is difficult to expect steady growth in consumer spending British under conditions of still negative growth in real incomes.

The current buy signal - strong and confirmed, as Chinkou Span is above the price, and the price broke the Ichimoku cloud. The Kijun -Sen and Tenkan -Sen are crossed in a "golden cross" on a daily chart. Both trend lines are growing parallel to each other. The cloud is growing.

Bollinger Bands shows an upward movement. The bands are widening and going up. We should consider a long position.
The MACD histogram is directed downward.

Trading Recommendations

If the bulls want to continue the growth, they need to break 1.61 and 1.6140 to start. This breakthrough opens the way to 1.62.