FX.co ★ Daily analysis of GBP/USD for January 23, 2014

Daily chart: GBP/USD failed to break the resistance level of 1.6540, after it had formed a bullish pattern below this level, so it is very likely that the bullish trend will remain strong for the rest of the week. The next goal of this pair will be the resistance level of 1.6663, so this pair is expected to start forming another bullish pattern (lower high). The MACD indicator is in positive territory.

H4 chart: This pair is below the strength level of 1.6592 , and it is very likely to start to form a lower high pattern to perform a breakout there. If successful, it is expected to rise to the level of 1.6680. Moreover, if this pair is able to consolidate below the level of 1.6550, it is expected to fall to the level of 1.6516. The MACD indicator is entering extremely overbought zone.

H1 chart: This pair is forming a bullish pattern below the resistance level of 1.6578 and below the point of control. Keep in mind that this pair has consolidated above the 200 SMA and the bullish trend has been too vertical, so we expect corrective movements in the coming hours. The MACD indicator is entering negative territory.

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 1.6578, take profit is at 1.6629, and stop loss is at 1.6526.