30, November 2016

GBP/USD (a 4-hour chart)

General overview

The pound strengthened on Tuesday following the upbeat Mortgage Approvals and Consumer Credit releases.

Current situation

The pound continued its sideways trades on Tuesday. The pair began the day around 1.2400 and spiked ahead of the European trades. The rally was limited by the upper band of the range around 1.2500 which stopped bulls' attack. The price broke the 50 and 100-EMAs in and stayed above them in the 4 hours chart. The 50, 100 and 200 EMAs remained neutral. The resistance lies at 1.2500, the support comes in at 1.2400.

MACD indicator is at the centerline. If the histogram enters the negative territory, that will indicate sellers’ growing strength. RSI remained within neutral territory.

Trading recommendations

We assume that the pound will remain in the latest range in the short-term. A move below or above the range is likely to show its further continuation. Below 1.2400, GBP/USD will likely target 1.2300 support. Conversely, the pair needs the 1.2500 resistance retest before the price can rally towards 1.2600.