There were no fundamental releases in the UK yesterday, and the British Pound fell down to 1.5457 against the dollar, with the pair capped by the 1.5500 level for most of the European session. Nevertheless, less hawkish than-expected words coming from FED’s members triggered a strong recovery in the GBP/USD pair that reached 1.5605 before stalling.
The short term picture has changed as in the 1 hour chart, the price has accelerated well above its 20 SMA, now around 1.5500, whilst the technical indicators are turning flat in extreme overbought levels, not yet signaling a downward corrective move.
In the 4 hours chart, however, the technical indicators maintain their strong upward slope after crossing their mid-lines, whilst the price recovered above its 200 EMA, currently at 1.5560, all of which supports another leg higher, particularly if the pair manages to advance beyond 1.5620, the immediate resistance. This financial trading course may be very useful if you are not sure how the EMAs work in forex trading.
Meanwhile the GBP/CAD maintained its negative tone, closing in the red, but above Friday’s low of 2.0204, as a crude oil prices recovery helped the CAD strengthen against all of its major rivals. In the short term, the cross is biased lower, as it was unable to advance beyond its 20 SMA, now gaining bearish slope around 2.0330 while the technical indicators continue to head south well below their mid-lines.
In the 4 hours chart, the 20 SMA continues to cap the upside, having extended its decline, while the RSI indicator heads south around the 37 level, and the Momentum indicator diverges higher, but below the 100 level, all of which maintains the risk towards the downside.
A break below the 2.0200 psychological level should see a sharp bearish acceleration with the immediate support below it at 2.0155