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05.08.201400:45 Forex Analysis & Reviews: Daily analysis of GBP/USD for August 05, 2014

Long-term review

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Daily chart: GBP/USD has made a slight rebound at the level of 1.6851, where this pair formed a fractal. This move could be the confirmation of the formation of a higher low pattern in favor of the bearish trend. The GBP/USD has been in a strong bearish bias, so it is likely that this pair will start making longer corrective movements. The MACD indicator is in negative territory.

H4 chart: This pair has made a rebound on the support level of 1.6820, so it is very likely that the GBP/USD will attempt to climb to the resistance level of 1.6900. If GBP/USD manages to make a breakout at that level, the next target would be the level of 1.6995, where the 200 SMA is located. MACD indicator is in positive territory.

H1 chart: The GBP/USD is conducting a breakout at the level of 1.6850 as the pair is intending to go up to the resistance level of 1.6900, which is close to the 200 SMA. On the other hand, if the GBPUSD makes a pullback at current levels, it would be expected to fall to the support level of 1.6800.

Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the GBP/USD pair breaks a bearish candlestick; the support level is at 1.6800, take profit is at 1.6750, and stop loss is at 1.6850.

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