FX.co ★ The technical analysis and trading recommendations for GBP/USD pair for the period 27.07 – 31.07

Day timeframe

Ishimoku:

Looking at the technical pattern, we can see the possible rising trend start-up. For the last week there were some changes. The price stood above Tenkan-Sen and Kidjun-sen. Tenkan-Sen is up-directed, suggesting further ascending trend perspectives. The sell signal was canceled, instead of it appeared the purchase signal. Kidjun-sen is still on the upside, signaling that the upward movement goes on. In case, Tenkan-Sen turns down, it is recommended to cut the long positions. Currently, is practiced the purchase signal shaped up by Tenkan-Sen and Kidjun-sen cross-cut. Presently, Tenkan-Sen and Kidjun-sen lines appeared to be the next support levels. In case the price fixes below Tenkan-Sen, the next price target level will be Kidjun-sen. The purchase signal will weaken if Tenkan-Sen reverses down or amid the price fix-up below Kidjun-sen. The Ishimoku cloud continues its upside motion and widens also signaling about rising tendency extension, as well as Chinkou Span, which is above the graph. If the price sets up below Tenkan-Sen it will be possible to wait for a slight descending movement.

Bollinger Bands:

This indicator shows the lateral movement. The lines narrowed and directed sidewards. As we can see, the price jumped off from the bottom Bollinger band, signaling about a possible upward trend continuation and fixed above the middle Bollinger band, that means a possible price move to the upper bound. The downside motion can be considered in case the Bollinger bands are down-directed. In near term is also probable the sideward motion within the Bollinger bands range, in case of its break through may start the trend dynamics. Consiquently, it is better to wait for this break through to determine the trend direction.

MACD:

This indicator shows the present sideward movement — neither the signal line, nor the hystogram go up or down. As it was said above, presently, there is a high probability of flat motion, it is recommended to wait for the movement to begin.

Trading recommendations:

The GBP/USD currency pair will possibly extent the lateral trend. That is why it is a good practice to begin trading amid break through of upper and bottom Bollinger bands and this movement confirmation by Ishimoku. In case of step away from the upper and bottom lines you may trade on the jump off with the first target — the middle Bollinger band and further to the opposite bound. Presently, is seen the most probable scenario with a break through of the upper Bollinger band and the purchase signal formation from Ishimoku.

The picture clarification

Ishimoku indicator:

Tenkan-sen — red line
Kidjun-sen — blue line
Senkou Span A — light brown stipple line
Senkou Span B — light purple stipple line
Chinkou Span — green line

Bollinger Bands indicator:

3 yellow lines

MACD indicator:

The red line and the histogram with the white bars in the indicators window

Have a good trading

July 27, 2009

Stanislav Polianskiy