FX.co ★ GBP/USD divergence analysis for July 4, 2013

Daily

After the quotes dropped to the correctional level of 23.6% - 1.5190 and formed a bullish divergence, the pair managed to reverse to GBP and started to grow. As the result, the uptrend may extend to the Fibonacci 38.2% - 1.5405 correctional level. In case the quotes fix below the 23.6% correctional level, we can count on the reversal to USD and further decline to the correctional level of 0.0% - 1.4835. CCI indicator demonstrates a bullish divergence: the indicator’s last low was lower than the previous one, whereas the quotes’ last low was above the previous one. No divergences are observed.

4h

Following the bullish divergence on H4 time frame, the pair reversed to GBP and initiated a quotes’ growth to 200.0% - 1.5319. The rebound from Fibonacci level can trigger the fall to 261.8% - 1.5008. If the quotes fix above the Fibonacci 200.0%, the quotes may further grow to the correctional level of 161.8% - 1.5512. MACD indicator shows bullish divergence: the indicator’s last low was above the previous one, while the quotes’ low was below the previous one. No new divergences are observed.