Technical analysis and trading recommendations for the GBP/USD currency pair for February 5

4-hour timeframe

The overall picture:

Now, we see the descendant movement continuation with the target level of 1.5682, which the price almost reached. Also, the price strengthened below both the major and minor support levels (1.5779), therefore, there are no barriers for the achievement of the target level. The next goal after 1.5682 is reached will be the 3rd support at 1.5582. Chinkou Span is placed below the price line that testifies about the downward movement and has strengthened the current sale signal. In case of the price fixing above Kijun-sen, the sale signal will ease. Bollinger Bands are down-directed, Bands are widening that witnesses about the descendant trend. MACD is also showing the downward movement. At the day timeframe, sale signal formed that intensified the current signal.

Trading recommendations:

At the moment, it is recommended to bear with the first target at 1.5682 and further 1.5582. But, in the event of the price fixates higher than Kijun-sen, the sale signal will weaken and it will be needed to close short positions. Stop loss to set above 1.5779 level.

The picture clarification:

Ishimoku indicator:

Tenkan-sen — red line

Kijun-sen — blue line

Senkou Span A — light brown stipple line

Senkou Span B — light purple stipple line

Chinkou Span — green line

Bollinger Bands indicator:

3 yellow lines

MACD indicator:

The red line and the histogram with the white bars in the indicators window.

Good trading,

Stanislav Polyanskiy

February 05, 2010