The GBP/USD pair is trading below is downward trend line on a four hour time frame. The pair has also pierced the Bollinger band and it is trading away from its 20 day moving average. This shows that the volatility is extremely high. The piercing of the Bollinger band has only significant importance when this takes place at an important level of support or resistance. In this case, it has taken place at an important level of support so, this reflects that the current trend can stall or it could reverse its direction from this point. Nonetheless, one can never rule out the possibility of the price going through this support level and moving further towards the downside.
The RSI and MACD indicators are both trading in an oversold zone and this further confirms the above argument that the trend is oversold and perhaps a change of consolidation could take place.
Important zones
1.5725-1.5689 Resistance
1.5462-1.5420 Support
Disclosure & Disclaimer: The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.
by Naeem Aslam