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02.10.201401:42 Forex Analysis & Reviews: Daily analysis of GBP/USD for October 02, 2014

Long-term review

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At the H4 chart, GBP/USD has formed a fractal at the resistance level of 1.6247, which has made this pair consolidate its bearish trend and it is likely that the GBP/USD will continue weakening in the coming hours, even if the support level of 1.6140 is quite strong. Recall that the GBP/USD found strong resistance at the 200-day moving average a few days ago, so this new bearish momentum could continue for a few more weeks in this pair. However, there is some indecision in the current trend, which is reflected in the MACD indicator.

H4 chart's resistance levels: 1.6247 - 1.6435

H4 chart's support levels: 1.6051 - 1.6004

We can see that the GBP/USD intends to extend the bearish trend in the H1 chart, because this pair performed a strong pullback at the level of 1.6250 so again, the GBP/USD is trying to make a breakout at the support level of 1.6170 to fall to the next target level of 1.6117 in the bearish road. The GBP/USD has been following a bearish trend line for several days, below the 200 SMA. The MACD indicator is moving into negative territory which could favor the progression bearish force.

H1 chart's resistance levels: 1.6252 – 1.6216

H1 chart's support levels: 1.6170 – 1.6117

Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the GBP/USD pair breaks a bearish candlestick; the resistance level is at 1.6170, take profit is at 1.6117, and stop loss is at 1.6223.

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