FX.co ★ Daily analysis of GBP/USD for January 22, 2014

Daily chart: This pair has made a breakout at the level of 1.6447 and is now consolidating above this level with a lower high pattern. It is very likely that this pair rise to the resistance level of 1.6540. However, expect this pair to start making corrective movements for the rest of the week, but today's session could be volatile to the current trend of GBP/USD. The MACD indicator is entering neutral territory.

H4 chart: The GBP/USD has managed to break the resistance that formed two fractals near the level of 1.6464 and now this pair is trying to break the resistance level of 1.6483 with a bullish pattern. If the pair manages to break that level, it is expected to rise to the level of 1.6516. However, the GBP/USD could find strong resistance at current levels, as this has formed a fractal. The MACD indicator remains in positive territory.

H1 chart: This pair made a bullish rebound above the point of control near the 200 SMA and the level of 1.6419 and now, the GBP/USD is consolidating above support level of 1.6464. If this pair manages to break the resistance level of 1.6507, it's expected to rise to the level of 1.6544 . Moreover, if this pair does break the support at the level of 1.6464, it is expected to fall to the level of 1.6419. The MACD indicator is entering extreme overbought zone.

Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if the GBP/USD pair breaks a bullish candlestick; the resistance level is at 1.6507, take profit is at 1.6544, and stop loss is at 1.6471.В