FX.co ★ Daily analysis of GBP/USD for January 27, 2014

Daily chart: The GBP/USD found strong resistance at the level of 1.6663 and now this pair is forming a bearish consolidation pattern below the level of 1.6540. However, we must stress that this pair has not yet formed a fractal, so it is very likely that the bullish trend to continue, as these movements could be only corrective. Moreover, if this pair does break the support at the level of 1.6447 , it is expected to fall to the level of 1.6326. The MACD indicator is in neutral territory.

H4 chart: This pair is forming a higher low pattern near the support level of 1.6483. Eventually, the GBP/USD could perform a bullish rebound at current levels to try to climb to the resistance level of 1.6516. If this pair makes a breakout at that level, would be expected to rise to the level of 1.6575. Moreover, if this pair does break the support at the level of 1.6464, it is expected to fall to the level of 1.6441. The MACD indicator is in negative territory.

H1 chart: The GBP/USD is trying to consolidate below the 200 SMA and the resistance level of 1.6507. However, this pair could perform a bullish rebound above the 200 SMA, and this pair could find dynamic support at that level. If this pair manages to break the resistance level of 1.6507, it's expected to rise to the level of 1.6544. The MACD indicator is entering extreme oversold 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 1.6470.