Paying attention to the 4-hour chart, you will notice that:
- at the end of trading on Monday, both gaps can be considered closed,
- mirrored level 1.34705 now acts as strong resistance for the British pound (GBP),
- since the beginning of the current day, bearish sentiment has been dominating in this currency pair.
Now let’s look at the indicators:
- The exchange rate is squeezed between the moving average with a period of 34 (resistance level 1.3450) on the one hand and the average with a period of 144 (support level 1.3370) on the other, and is currently trying to gain a foothold below the averages with periods of 55 and 89.
- The MACD histogram is still in the negative zone and below its signal line, but it started to move almost parallel to the time axis and is not giving clear signals at the moment.
- Stochastic Oscillator is in the neutral zone and is giving a buy signal for the British pound (GBP), as the% K line rises above the% D line.
Despite the indicators, we expect that the bears’ offensive may continue, and their potential targets are located at 1.3315, 1.3219 and 1.3180.
Cancellation of the ‘bearish scenario’ will occur in case of breakdown of the mirror level 1.34085, which may open the way to the levels of 1.34705, 1.3526 and 1.35845.
Resistance levels: 1.34085, 1.34385, 1.3450, 1.34705, 1.34925, 1.3526
Current price: 1.3391
Support levels: 1.3370, 1.3355, 1.3315, 1.32795, 1.3219, 1.3180, 1.3134
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