Monday, July 18, 2011

GBP/USD Ichimoku Weekly Forecast - 18 July 2011

Weekly GBP/USD

Many experts note that sterling is currently quite vulnerable to the external factors. In particular, the dynamics of the British currency depends on the situation in the euro area and the United States and the rates of their currencies. This, however, doesn’t reduce the necessity of using the instruments of technical analysis.   

Last week the trading of GBP/USD was once again quite volatile – there was a candle with long lower shadow. The bulls managed to gain – this was as a large extent due to the support provided by the rising Ichimoku Cloud.

On the weekly chart, as it was expected, Tenkan-sen (1) and Kijun-sen (2) formed the “dead cross” (2). Both the Turning (1) and the Standard (2) lines provide resistance for pound. It’s necessary to note that Kumo is getting narrower that means that the bulls are gradually losing their powers.

1. weekly gbpusd

Chart. Weekly GBP/USD


As we had projected in our last forecast, sterling managed to climb to the resistance line connecting May and June highs.

On Wednesday the prices showed strong advance, then reached on Thursday the levels above the Standard line (1). Never the less, the bullish relief was short-lived – already on Friday the pair tested levels under Kijun (1), while this week the trade has started below this line.    

Tenkan-sen (2) and Kijun-sen (1) are still holding in place the “dead cross” formed below the Ichimoku Cloud – the bearish factor. The Cloud itself keeps going down that also isn’t very optimistic.

As a result, the outlook for this week seems to be more negative.

2. daily gbpusd

Chart. Daily GBP/USD

published by FBS Holdings © 2011