31, January 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

General Picture

GBP/USD formed a new buy signal – "a golden cross". Yesterday the price worked out Ichimoku cloud base, but did not go further. A current buy signal is confirmed and weak as Chinkou Span entrenched above the price chart and the price is below the Ichimoku cloud.

At the present moment we advise you to open orders with the first target 1.5879 – the first resistance level. It is recommended opening orders only if the price enters Ichimoku cloud.

After overcoming this target the upward movement may continue to the second resistance level – 1.5959. The upward movement will have force as long as the price is above the Kijun-sen (1.5750) if the price fixes itself below this line, a buy signal will become weak and the movement will continue to the second support level 1.5667.

Chinkou Span is above the price chart that confirms the current signal for the purchase.

Bollinger Bands show the beginning of an upward movement, the bands widen and directed upwards. Now the best thing is to consider long positions in the market.

MACD is up, indicating an upward movement, but the "golden cross" is weak and it is early to open long positions. If the price fixed inside Ichimoku cloud the upward movement could gain some force, still if the price rebounds from it that could trigger a downward correction.

Trading recommendations

It is advised to consider long positions to 1.5879, but only after the price fixing within Ichimoku cloud. When the price overcomes this target it will continue to the level 1.5959.

Stop-loss should be placed below 1.5750 and with the increase of the line move up and stop level. After gaining profits of 50 - 60 points stop loss can be moved to a breakeven.

When opening buy orders MACD must show an upward direction of a trend. Take-profit can be placed just below the target level - 1.5870 and 1.5950.

In addition to the technical picture you should also consider the fundamental analysis.