Januari 6, 2014 - GBP/USD: long correction is highly probable | Forex: Ichimoku Clouds. Review of USD/CHF

GBP/USD: long correction is highly probable Current trend The year has started with Dollar’s strengthening. The pair GBP/USD went down after the release of negative stats from UK. PMI Manufacturing dropped down to the level of 57.3 point last week, and the pair has lost 200 points since. Today UK PMI Services will be published as well as US Non-Manufacturing PMI. If Britain index stays true to the positive forecasts, the pair GBP/USD will be corrected upwards, otherwise, Bearish movement will go on. In mid-term scenario we expect the trend to reverse to the descending one. The assumption is justified by several factors. First of all, US economy showed great growth in 4th quarter of 2013. Secondly, demand of US Dollar is growing, because the Pound is overbought. At last, negative macroeconomic data from UK affect British currency. Support and resistance The pair is going to reach support at the 50% Fibonacci retracement (1.5750). Additional support levels are 1.6320, 1.6200, 1.6100 and 1.5860. Resistance levels will be at 1.6450, 1.6540, 1.6600 and 1.6740. Trading tips Short positions can be opened at current price with targets around 1.6000-1.5860. Pending sell orders should be placed at 1.6450 with take-profits at 1.6100. Dmitriy Likhachev Analyst of LiteForex Group of Companies ------------------------------------------------- Forex: Ichimoku Clouds. Review of USD/CHF USD/CHF, H4 On the four-hour chart Tenkan-sen Line is above Kijun-sen, they are both horizontal. Chinkou Span line is above the price chart; current cloud is ascending. The closest support level is Tenkan-sen line (0.9027). One of the previous maximums of Chinkou Span line is going to be a resistance level at 0.9094. USD/CHF, D1 Let’s look at the daily chart. Tenkan-sen and Kijun-sen lines are getting closer and going to form a reversal pattern. Chinkou Span is approaching the price chart from below; current cloud is still descending. The pair has broken through Tenkan-sen and Kijun-sen lines; the latter has become a support level at 0.8955. The next obstacle for the price on its way up will be the lower border of the cloud (0.9084). Key levels Support levels: 0.9027, 0.8955. Resistance levels: 0.9094, 0.9084. Trading tips On the four-hour chart we can see a slowdown of the upward movement; however, the same movement on the daily chart is a long correction of Bearish trend. Targets for the long positions are at 0.9094 and 0.9084. Anastasiya Glushkova Analyst of LiteForex Group of Companies