Paying attention to the 4-hour chart, you will notice that:
- for most of the European session on Monday, the GBPUSD currency pair was dominated by bullish sentiments, as a result of which our targets (1.4111 and 1.4137) were fulfilled; in terms of fundamental analysis, the British pound (GBP) received significant support from positive news,
- the upward rally slowed down only at around 1.41575, after which consolidation began.
Now let’s look at the indicators:
- The currency remains well above the moving averages with periods of 34, 55, 89 and 144, which are directed upward and indicate continued bullish sentiment (in the medium term), as well as a number of support levels 1.3956, 1.3935, 1.3919 and 1.3869.
- The MACD histogram is still in the positive area and above its signal line, continues to rise smoothly and thus gives a signal to buy the British pound (GBP).
- The Stochastic Oscillator remains in the overbought area and is currently not forming clear signals, since the% K line began to move almost parallel to the time axis, and also almost crossed the% D line.
Since it is extremely risky to trust only one clear signal, and also because of the ongoing consolidation, as a confirmation that bullish sentiments may increase in the forex market in this currency pair, it is necessary to wait for the breakdown of the resistance level 1.41465, which can open the way to the levels 1.4181 and 1.4241.
Otherwise, the rate of the GBP / USD currency pair will move within the 1.4116 – 1.41465 price range.
An alternative (‘bearish’) scenario will be ‘activated’ in case of a breakdown of the support level 1.4116, after which the quotes may decline to levels 1.40895, 1.40245 and 1.40025.
We remind forex traders that today at 17:30 Moscow time. Bank of England Governor Andrew Bailey will participate in a panel discussion at the ARRC Symposium on LIBOR. Unexpected statements can have a significant impact on the further course of trading.
Resistance levels: 1.41465, 1.41575, 1.4181, 1.4241
Current price: 1.4127
Support levels: 1.4116, 1.40895, 1.40435, 1.40245, 1.40025
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