FX.co ★ GBPUSD: Daily analysis for May 22, 2013

Daily chart: The GBPUSD pair failed to break the resistance level 1.5270 and due to poor economic data released yesterday in the UK, the cable fell over 100 pips, finding support in the 1.5159 level. Above this level, this pair is forming a higher low pattern and is expected to fall to support at the 1.5068 level. Furthermore, there is the possibility that the cable will make a bullish rebound at the level of 1.5159 and rises again to the resistance level at 1.5270. The strength remains strong in the sellers of this pair, but the buyers are trying to avoid that the GBPUSD pair breaks the support level at 1.5068, because if it does, in the long term this pair will fall to the level of 1.4894. The MACD indicator is in negative territory, showing weakness in the bearish trend at the moment.



H4 chart:In this chart there are two strong support levels in 1.5148 and 1.5098. If GBPUSD breaks the support level at 1.5098, it is expected to fall to the level of 1.5042. The cable continues below the 200-day moving average and it is very difficult for this pair to back on the bullish way for this week due to strong resistance above it, which can only be overcome if economic data favor the buyers of this pair. The MACD indicator is entering negative territory, supporting a bearish outlook on GBPUSD for today. Furthermore, we must be careful with bearish divergence that has formed in the MACD indicator, which might indicate a change of trend in this pair, something that I consider is unlikely at the moment, due to the weakness that the cable has.


H1 chart: The GBPUSD pair is forming a higher low pattern in this chart, above the support at the level of 1.5152. At the resistance level of 1.5198, a Point of Control (POC) was formed, indicating that this resistance is very strong and will be technically difficult, this pair could break it in today's session. If the cable breaks the support at the level of 1.5119, it is expected to fall to the level of support 1.5079. On the other hand, if the GBPUSD pair manages to break the resistance level 1.5198, it is expected to rise to the level 1.5249, which is also the 200-day moving average. The MACD indicator is in positive territory.



Fundamental Outlook: For today's session at 08:30 GMT the Retail Sales m / m (Previous: -0.7% / Forecast: 0.0%) and the MPC Meeting Minutes are expected to be published in the UK . If the current reading is lower than the forecast, this pair could do bearish movements during the hour. In addition, in the United States at 14:00 GMT, Existing Home Sales (Previous: 4.92M / Forecast: 4.99M) will be published and Fed Chairman's Ben Bernanke will testify in the U.S. Congress, an event that could generate high volatility in all the USD pairs.



Trading recommendations for today: Based on the H1 chart, place SELL orders (short) only if the GBPUSD pair breaks with a bearish candlestick, the support level is at 1.5119, take profit is at 1.5079, and stop loss is at 1.5152.