British Pound (£) ⇨ US Dollar ($) (GBPUSD) Brexit and the Pound

British Pound (£) ⇨ US Dollar ($) (GBPUSD) Brexit and the Pound

British Pound (£) ⇨ US Dollar ($) (GBPUSD) Brexit and the Pound

Highlights

Several markets across Asia and Europe were closed for the May Day holiday. Tokyo markets will be closed for three days from Wednesday for a string of holidays known as Golden Week, and many investors take additional time off.

May has said she wants UK to be best place for business

British Prime Minister Theresa May expects divorce talks with the European Union to be tough, she said on Sunday after EU leaders agreed stiff terms and voiced alarm at “illusions” in London that may wreck a deal.

May said on Sunday she would not increase value-added tax (VAT) if her Conservative Party was elected on June 8, but she did not extend the same promise to other major taxes.

Polls show May is on course for victory in the election

[vc_row][vc_column][vc_column_text]The current trend is up and all orders on the long side may be considered.

Market activity analysis suggests that long trades put on outside of the +L+ focus zone have a lower probability of success than those placed in those zones highlighted on the expert ribbon.

The current market price activity is Strongly Bullish and suggests favorable trade opportunities on the long side.

If already holding long positions, we would look to partial profits on any retracement to 1.2758. Traders with remaining long positions after profit taking should consider placing exit stops in the region of 1.2498. Be prepared for a potential short term price fall back to the 1.2742 area.

Suggested standing placement of fail-safe stops…
If Long — exit all contracts at … 1.2401
If Short — exit all contracts at … 1.2965[/vc_column_text][vc_single_image image=”40040″ img_size=”full” alignment=”center” onclick=”img_link_large” img_link_target=”_blank”][vc_column_text]GBP= broke above the down trendline at 1.28, 9 day(s) ago. This is a bullish sign.

This down trendline, currently with an ending point at 1.26, may now provide downside support.

Volume on the day of the breakout was neither extremely heavy nor extremely light–providing no convincing evidence either way as to the validity of the breakout.

The most recently confirmed up trendline for GBP= has an ending point currently at 1.22. Expect prices to have some difficulty falling below this trendline. A break below this trendline (particularly on heavy volume) would be a bearish sign.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_video link=”https://youtu.be/KfkwFXXV86I”][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]Momentum

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 86.2638. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 8 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 70.00. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 8 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 93. This is not a topping or bottoming area. The last signal was a sell 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 buy 12 period(s) ago.[/vc_column_text][vc_column_text]GBP= closed down -0.003 at 1.292. Volume was 75% below average (consolidating) and Bollinger Bands were 66% wider than normal.

Open  High   Low     Close   Volume
1.295  1.295   1.290  1.292    34,781

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close:                             1.28            1.25          1.26
Volatility:                          13               10              12
Volume:                       126,874   130,978    137,048

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
GBP= is currently 2.5% above its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into GBP= (mildly bullish). Our trend forecasting oscillators are currently bullish on GBP= and have had this outlook for the last 27 periods. Our momentum oscillator is currently indicating that GBP= is currently in an overbought condition.[/vc_column_text][vc_video link=”https://youtu.be/iPAd9L2dRRY”][/vc_column][/vc_row]

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S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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