Analysis of GBP/USD Divergences as of July 6. Bearish divergences led to the pound sterling
The GBP/USD pair on the 4-hour chart reversed in favor of the US dollar and began the drop process in the direction of the correction level of 200.0% to 1.3048, after the bearish divergence of the CCI indicator. No new maturing divergences are observed on July 6. Passing the last peak of the divergence will allow to expect the resumption of growth towards the corrective level of 161.8% – 1.3301. The consolidation of quotations above the level of Fibo 161.8% will increase the chances of further growth.
The Fibo grid is built on extremes from March 1, 2018 and April 17, 2018.
On the hourly chart, the GBP/USD pair reversed in favor of the US currency and fell to the Fibo level of 61.8%, after the bearish divergence of the CCI indicator. Fixing the pair under the correction level of 61.8% will increase the probability of further falling in the direction of the next Fibo level of 50.0% – 1.3182. Quit of quotations from the level of Fibo 61.8% will allow to expect a turn in favor of the English currency and a return to the correctional level of 76.4% – 1.3252.
The Fibo grid is built on the extremes of June 22, 2018 and June 28, 2018.
Recommendations for traders:
Buying of the GBP/USD pair can be carried out for the purpose of 1.3252 and a Stop Loss order under the correction level of 1.3213, if there is a retreat from the Fibo level of 61.8% (hourly chart).
Selling the GBP/USD pair will be possible with targets of 1.3182 and 1.3150 and a Stop Loss order above the correction level of 61.8% if the closing is under the Fibo level of 1.3213.