FX.co ★ Daily analysis of GBP/USD for March 12, 2014

Daily chart: The bearish bias on GBP/USD continues to strengthen and it is very likely that this pair falls to the support level of 1.6540. This breakout could begin a strong bearish trend in the medium term. If the pair manages to consolidate below that level, it is expected to fall to the level of 1.6447. The MACD indicator is still in negative territory, so the bearish outlook remains intact.

H4 chart: This pair has dropped to the 200-day moving average which is forming a higher low pattern. If the pair manages to consolidate below the support level of 1.6583, it's expected to fall to the level of 1.6516. On the other hand, if it manages to make a breakout on the resistance level of 1.6667, it's expected to rise to the level of 1.6822. The MACD indicator is entering oversold.

H1 chart: The GBP/USD has consolidated below the point of control near the resistance level of 1.6629. If the pair manages to make a breakout in the support level of 1.6578, it's expected to fall to the level of 1.6544. However, this pair is likely to try to consolidate above the POC, although the bearish bias remains very strong. The MACD indicator is entering neutral 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 1.6578, take profit is at 1.6544, and stop loss is at 1.6611.