FX.co ★ Technical analysis and trading recommendations for GBP/USD for July 12, 2010

4-hour timeframe

Overview:
The falling motion keeps on signaled by Bollinger bands. The ‘sell’ signal shaped as far back as flat, therefore, Ishimoku does not give a target in this case. The signal is strong and confirmed, which is signaled by the price position against Ishimoku cloud and Chinkou Span placement below the price curve. The price went down below the pivot level of 1.5117, therefore the further movement has the target at 1.4995, the first support level. If the price fixates above Kijun-sen, it will mean the current signal weakening. In case of the price fixing below the first support level, next target will be at 1.4927. Bollinger bands indicate a decreasing motion – the bands are diverging again and down-directed. MACD is moving down signaling about current downward movement.
Trading recommendations:
In this situation, it is advisable to bear with the target at 1.4927. Stop loss to set above 1.5110. In case of MACD up-reversal, close short positions manually.
Except the technical picture, fundamental reports and time of their release should be considered also.
The chart annotation:
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.