GBP/USD: Ichimoku analysis
Daily. The past week hasn’t introduced significant changes to GBP/USD situation. Pound was trading above the lower border of the Tenkan-Kijun channel that proves the presence of a short-term flat. However, you should pay attention to the character of the Tenkan-sen’s (TS) movement. In the past two days the line abruptly went down intending to cross with the rising Kijun -Sen (KS). It’s obvious that the formation of a dead cross at the current levels would be a further confirmation of corrective decline. In this case, very soon the prices may test the levels of the cloud top. To do that GBP will have to go back to Tenkan-sen.
Chart. Daily GBP/USD
H4. On H4 the market’s decline slowed down at the lower border of the Ichimoku cloud. Senkou Span B served as a support during the past week. However, after the bulls by failing to break an important resistance level at $1.6015, bearish sentiment started growing again. Thus, the Ichimoku cloud expanded to the downside confirming a high probability of the downtrend resumption. Now all lines of the Indicator are directed sideways. If the prices fix above Tenkan and Kijun (C) which have the same value, we may see a short-term burst of activity on the part of buyers, and for another attempt to test $1.6015. If the price fall below Tenkan and Kijun, the downtrend will resume.
Chart. H4 GBP/USD
Tatyana Norkina for FX BAZOOKA