FX.co ★ GBP/USD's technical analysis and trading recommendations for August 2, 2010

4-hour timeframe

General picture:
The purchase signal with the target level at 1.5666 keeps on. This signal is confirmed by Chinkou Span fixation above the price curve as well as the price fixing above Ishimoku and Kijun-sen. Also, the price managed to fixate above the pivot level of 1.5607. Therefore, an intermediate target of the rising motion is the first resistance level of 1.5802. it should be considered that the target level of 1.5666 has been already reached, although on the other hand, there are no any signs of the completion of the upward motion. After the price overcoming of the resistance level of 1.5802, the target will be the second resistance level of 1.5917. Chinkou Span is positioned above the price curve that means that an upward movement is preferable. If the price fixates below Kijun-sen (1.5600), it will mean the ‘buy’ signal weakening and it is better to close long positions. Bollinger bands indicate an ascendant motion – the bands are diverging and up-directed. MACD is rising also testifying to continuation of the upward tendency.
Trading recommendations:
This situation suggests to bull with the target at 1.5802. Stop loss to set below 1.5600. In case of MACD reversal downwards close positions manually.
Apart from the technical picture, it is important to consider the fundamental reports and time of their release.
The chart annotation:
Ishimoku indicator:
Tenkan-sen — red line
Kijun-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.