FX.co ★ GBPUSD: Daily analysis for October 16, 2013

Daily chart: This pair has not yet shown a clear trend in this chart, because GBPUSD is still forming a higher low pattern above the bullish trendline. Recall that if the pair manages to break that trendline, it is expected to fall to the level of 1.5883. Furthermore, GBPUSD may rise to the resistance level of 1.6046 if the bullish trendline serves as good support. The MACD indicator remains in negative territory.

H4 chart: GBPUSD made a bullish rebound at the moving average of 200 and now this pair is trying to consolidate above the bullish trendline near the 1.5975 level. If this pair manages to break the resistance level of 1.6004, it is expected to rise to the level of 1.6085. On the other hand, it is very likely that this pair fall back to the 200-day moving average near the 1.5925 level. The MACD indicator is entering extremely overbought zone and in neutral territory.

H1 chart: GBPUSD made a bullish rebound from the support at the 1.5925 level and the pair tried to consolidate above the resistance at 1.5980, but ultimately did not succeed and formed there a fracta, below the 200-day moving average. Now, it is very likely that this pair will drop to the level of 1.5925. On the other hand, if the pair manages to break the resistance at 1.5980, it is expected to rise to the level of 1.6031. The MACD indicator is entering negative territory.

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 1.5925, take profit is at 1.5871, and stop loss is at 1.5980.