British Pound: USD/GBP (GBP=X) Parliament remains deeply divided over Brexit
The fog engulfing the Brexit remains as thick as ever. An embattled Prime Minister May announced her resignation on Friday, but her leadership has been so tenuous in recent months, that the move was viewed with more relief than surprise. Meanwhile, consumer inflation climbed to 2.1% in April, up from 1.9% a month earlier. This is good news for the BoE, as inflation remains close to the bank’s target of 2.0%.
The Federal Reserve released the minutes of the May policy meeting. The minutes indicated that although members are more optimistic about economic growth, they remain committed to maintaining current rate levels, given that inflation remains low. It should be noted that the policy meeting took place on May 1-2, one week before President Trump announced new tariffs on China, which has significantly escalated trade tensions between the U.S. and China.
The Fed minutes reinforced the message that no rate moves are planned until next year, but the markets aren’t buying it, with many analysts expecting at least one rate cut in 2019. The CME Group has priced in a 36% likelihood of a 25-point basis cut at the September meeting. The possibility of lower U.S. rates makes the greenback less attractive to investors and could dampen sentiment towards the U.S. dollar.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 1.29.
The projected upper bound is: 1.29.
The projected lower bound is: 1.26.
The projected closing price is: 1.27.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 2 white candles and 8 black candles for a net of 6 black candles. During the past 50 bars, there have been 18 white candles and 32 black candles for a net of 14 black candles.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 44.4444. This is not an overbought or oversold reading. The last signal was a buy 1 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 34.66. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 1 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -52. This is not a topping or bottoming area. The last signal was a buy 1 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 10 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed up 0.001 at 1.272. Volume was 99% below average (consolidating) and Bollinger Bands were 59% wider than normal.
Open High Low Close Volume___
1.273 1.276 1.272 1.272 2,005
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.27 1.30 1.30
Volatility: 6 7 10
Volume: 123,337 155,159 175,198
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FOREX GBP= is currently 1.8% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of GBP= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on GBP= and have had this outlook for the last 8 periods.