Paying attention to the 4-hour chart, you can see that a short-term ‘equilibrium’ has been found in the GBPUSD currency pair on the forex market:
- on the one hand, at the level of 1.3904, there was a strong resistance for the British pound (GBP),
- on the other hand, there is noticeable support at the 1.38675 level.
Now let’s look at the indicators:
- The currency rate is sandwiched between a moving average with a period of 34 (resistance level 1.3907) on the one hand and averages with periods of 55, 89 and 144 (a series of support levels 1.3871, 1.38245 and 1.38105) on the other.
- The MACD histogram has practically merged with its signal and zero lines and is not giving clear signals at the moment.
- Stochastic Oscillator is in the neutral zone and is giving a signal to sell the British Pound (GBP), as the% K line falls below the% D line.
Since it is extremely risky to trust only one clear signal, and also due to the absence of a pronounced trend, as a confirmation that bearish sentiments may increase in the forex market in this currency pair, it is necessary to wait for the breakdown of the support level 1.38675, which can open the way to levels 1.3837, 1.38025 and 1.3755.
Otherwise, the rate of the GBP / USD currency pair will move within the price range 1.38675 – 1.3904.
An alternative (‘bullish’) scenario of the development of events will be ‘activated’ in case of a breakdown of the strong resistance level 1.3904, after which the quotes may go to the levels of 1.3949, 1.3981 and 1.40085.
Resistance levels: 1.3904 / 07, 1.39365, 1.3949, 1.3957, 1.3981, 1.40025, 1.40085
Current price: 1.3889
Support levels: 1.38865, 1.3871, 1.38675, 1.3855, 1.3837, 1.38245 / 225, 1.3815 / 105
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