FX.co ★ Daily analysis of GBP/USD for October 31, 2014

The GBP/USD pair is trying to form a bearish pattern below the resistance level of 1.6004. This pair could fall in the coming hours to the support level of 1.5951, while this currency pair could make a bullish retracement above the resistance level of 1.6051. If successful, the next target would be the bearish trend line at the 1.6110 level which is close to the 200 SMA. MACD indicator remains in the negative territory, and this pair is likely to move in range during the session today.

H4chart's resistance levels: 1.6004 / 1.6051

H4chart's support levels: 1.5951 / 1.5874

On the H1 chart, we can see that this pair has found strong support at the level of 1.5980, so that GBP/USD may begin to form a lower low pattern. If GBP/USD manages to support a breakout at that level, this pair could drop to the 1.5925 level, marking a new low. However, the GBP/USD pair still remains next to the SMA 200. The MACD indicator is entering the overbought zone.

H1 chart's resistance levels: 1.6031 / 1.6075

H1 chart's support levels: 1.5980 / 1.5925

Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the GBP/USD pair breaks a bearish candlestick; the support level is at 1.5980, take profit is at 1.5925, and stop loss is at 1.6035.