The GBP / USD currency pair on the 4-hour chart completed the rebound from the correction level of 161.8% — 1.3301 and a reversal in favor of the US dollar. As a result, the decline resumed in the direction of the corrective level of 200.0% — 1.3047. Trading divergences on July 12 were not shown in any indicator. The consolidation of the pair’s rate above the Fibo level of 161.8% can be interpreted as a reversal in favor of the British currency and expect a certain increase in the direction of the corrective level of 127.2% — 1.3530.
The Fibo grid is built on the extremes from March 1, 2018 to April 17, 2018.
On the hourly chart, the pair conducted a fixation first under the Fibo level of 38.2% — 1.3242, and then below 50.0% — 1.3206. Thus, the fall in quotations may continued towards the direction of the next correction level of 61.8% — 1.3169. On July 12, a maturing bullish divergence can be observe in the CCI indicator. Its formation will allow us to expect a reversal in favor of the British currency and some growth in quotations. Fixing the pair above the correction level of 50.0% will similarly work in favor of the beginning of growth towards the Fibo level of 38.2% — 1.3242.
The Fibo grid is built on the extremes of June 22, 2018 and June 28, 2018.
Recommendations for traders:
The Fibo grid is built on the extremes of June 22, 2018 and June 28, 2018. New purchases of the GBP/USD pair can be made with targets of 1.3242 and 1.3289 and a Stop Loss order should be under the correction level of 1.3206 if there is a close above the Fibo level of 50.0% (hourly chart), especially in conjunction with the bullish divergence.
Selling the GBP/USD pair will be possible with targets 1.3169 and 1.3122 and a stop loss order above the correction level of 50.0% if a supposed breakthrough of the low-end divergence occurs.
* The presented market analysis is informative and does not constitute a guide to the transaction.