British Pound: USD/GBP (GBP=X) Stats, Impeachment, and Brexit to Take a Back Seat as Iran Takes Center Stage
On the Macro
It’s a busy week ahead on the economic calendar, with 51 stats to monitor. In the previous week, just 27 stats had been in focus.
Following the holiday season and lack of stats to provide direction, we could see some major moves as volumes return to normal levels.
For the Dollar:
On Tuesday, November factory orders and December ISM non-manufacturing PMI figures will provide direction.
The focus will then shift to ADP nonfarm employment change figures for December due out on Wednesday. Solid labor market conditions have continued to support the U.S economy, so expect sensitivity to the numbers.
With economic data limited to the weekly jobless claims on Thursday, nonfarm payroll and wage growth figures wrap things up on Friday.
While the ADP numbers will provide direction, expect wage growth and the NFP numbers and unemployment rate to have the greatest impact.
Finalized Markit PMI numbers on Monday and trade data on Tuesday will likely have a muted impact on the Dollar.
On the geopolitical front, the signing of the U.S – China phase 1 agreement, Brexit and the Middle East will also need considering.
The killing of Iran’s military commander Soleimani raises the prospects of the U.S getting caught up in proxy wars across the region.
The Dollar Spot Index ended the week down by 0.08% to $96.838.
For the Pound:
It’s a relatively busy week ahead on the economic calendar. Key stats include finalized service sector and composite PMI numbers on Monday and the BRC Retail Sales Monitor numbers on Thursday.
3rd quarter labor productivity numbers will also provide direction on Wednesday.
We will expect December house price figures due out on Wednesday and Thursday to have a muted impact on the Pound.
Outside of the numbers, it will be all eyes on Parliament, as MPs return on Thursday. Brexit chatter will certainly build, with Johnson likely to want to quash any negative chatter towards trade negotiations.
The GBP/USD ended the week up by 0.04% to $1.3083.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 1.33.
The projected lower bound is: 1.29.
The projected closing price is: 1.31.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 26 white candles and 22 black candles for a net of 4 white candles.
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 32.0512. This is not an overbought or oversold reading. The last signal was a sell 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 51.64. 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 sell 14 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 12. This is not a topping or bottoming area. The last signal was a buy 7 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 buy 4 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed up 0.000 at 1.309. Volume was 99% below average (consolidating) and Bollinger Bands were 4% narrower than normal.
Open High Low Close Volume___
1.307 1.309 1.307 1.309 1,146
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1.31 1.30 1.27
Volatility: 10 9 9
Volume: 73,205 95,201 120,211
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 3.1% above its 200-period moving average and is in an upward trend. Volatility is high 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 bullish on GBP= and have had this outlook for the last 4 periods.