British Pound: USD/GBP (GBP=X) well supported against its major competitors

British Pound: USD/GBP (GBP=X) well supported against its major competitors

The British Pound remains relatively well supported against its major competitors on Thursday, October 03 with foreign exchange markets opting to watch the currency from the sidelines as they try to gauge whether the UK’s final Brexit proposals to the EU will be accepted.

Sterling is trading within increasingly confined ranges, a sign that traders are unwilling to take sizeable directional bets on the currency noting that risks for a move either higher or lower are large.

On the one hand, an all out rejection of the UK’s latest ‘take it or leave it’ Brexit proposals would be negative for Sterling; however the currency still has downside protection in the form of a Parliamentary Act that effectively outlaws a ‘no deal’ Brexit from occurring on October 31.

On the other hand, the striking of a deal would be an all-out positive for the currency and we would expect a sizeable rally should one be struck. Those looking to bet against Sterling would be wary of the risks of doing so under such circumstances, and markets will await further clarity on the direction of Brexit before engaging in fresh trades we believe.

The Pound-to-Euro exchange rate is quoted at 1.1228, with the week’s low at 1.1189 and the high at 1.1320.

The Pound-to-Dollar exchange rate is quoted at 1.2303, the week’s low is at 1.2207 and the high at 1.2344.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1.26.

The projected lower bound is: 1.22.

The projected closing price is: 1.24.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 51.3314. 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 51.91. 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 35 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 -44. This is not a topping or bottoming area. The last signal was a buy 0 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 6 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed up 0.006 at 1.236. Volume was 18% below average (neutral) and Bollinger Bands were 14% narrower than normal.

Open     High      Low     Close     Volume___
1.230 1.241 1.226 1.236 98,441
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.24 1.23 1.27
Volatility: 8 10 9
Volume: 108,124 117,694 143,973

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.

Summary

FOREX GBP= is currently 2.8% below its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 0 periods.

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