Paying attention to the 4-hour chart, you will notice that:
- on Tuesday trading, the breakdown of the strong support level 1.3668 led to a noticeable increase in bearish sentiment, and the development of our first two targets (1.3630 and 1.3609) was completed during the European session; also note that at the moment the quotes were close to our third target – 1.3550,
- noticeable resistance for the British pound (GBP) formed at 1.36335,
- from the early morning, the bears are trying to develop an offensive.
Now let’s look at the indicators:
- The currency remains well below the moving averages with periods of 34, 55, 89 and 144, which are directed downward and indicate continued bearish sentiment (in the medium term), as well as a series of resistance levels 1.3764, 1.3791, 1.3798 and 1.3836.
- The MACD histogram is still in the negative zone and below its signal line, but it started moving almost parallel to the time axis and is not giving clear signals at the moment.
- Stochastic Oscillator has come out of the oversold 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 pressure on the British pound (GBP) may continue, and potential bearish targets are located at 1.3571, 1.3527 and 1.3482.
Cancellation of the ‘bearish scenario’ will occur in case of a breakdown of the resistance level 1.36335, which may open the way to the levels of 1.3668, 1.3711 and 1.37495.
Resistance levels: 1.36335, 1.3668, 1.3676, 1.3689, 1.37025, 1.3711, 1.37245, 1.37495
Current price: 1.3618
Support levels: 1.3606, 1.35925, 1.3571, 1.3527, 1.3482
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