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British Pound: GBP/USD (GBP=X) Downside Risks in a No-Deal Brexit Scenario

$GBP #BritishPound #USD #FX #Currencies #Trading #Markets

British Pound
Ticker: GBP=
Price: $1.2945

British Pound Outlook

The pound eased from against the dollar from session highs Monday, but remained supported as the EU appeared to extend an olive branch, saying it remains committed to intensifying Brexit-deal talks with the U.K.

GBP/USD to rose 0.45% to $1.2971, below session highs of $1.3025, but well above lows of $1.2897.

EU Brexit negotiator Michel Barnier confirmed the EU remained “available to intensify [Brexit] negotiations in London,” marking a change in tone somewhat after EU leaders had dropped their pledge to intensify trade talks last week and called on the U.K. to make concessions for a deal.

U.K. Cabinet Office Minister Michael Gove had suggested the U.K. would not resume talks moments before acknowledging signs of progress, “Even while I’ve been at the dispatch box, it’s been reported that there has been a constructive move on the part of the EU and I welcome that,” Gove said.

The game of brinkmanship between both parties, however, is expected to continue in the wake of little progress on key issues that have held back talks including the so-called level playing field commitments, fisheries and issues of governance.

The positive start to the week for sterling comes as speculative traders appear to be betting both sides will eventually find common ground and clinch a post-Brexit trade deal.

Ahead of yet another crucial phase for Brexit and sterling this week, “we suspect market positioning on GBP did not shift too much on the short side after the confrontational comments and threat of no-deal witnessed last week,” ING said in a note. “[W]e believe this is a market that is far from pricing in a no-deal outcome and we would not be surprised to see only a minor uptick in GBP net-shorts in the next CFTC report.”

GBP/US Dollar Exchange Rate

Today’s Forex Rates

GBP/US Dollar FX Polls

Economic Events

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1.32.

The projected lower bound is: 1.27.

The projected closing price is: 1.29.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.

A doji star occurred (where a doji gaps above or below the previous candle). This often signals a reversal with confirmation occurring on the next bar.

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 35.4332. This is not an overbought or oversold reading. The last signal was a sell 5 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 50.37. 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 44 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 -2. This is not a topping or bottoming area. The last signal was a sell 5 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 14 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed up 0.000 at 1.295. Volume was 65% below average (consolidating) and Bollinger Bands were 33% narrower than normal.

Open    High    Low     Close     Volume
1.295   1.296   1.293   1.295     45,069
Technical Outlook
Short Term:        Neutral
Intermediate Term: Bullish
Long Term:         Bullish
Moving Averages: 10-period      50-period      200-period
Close:           1.30           1.30           1.27
Volatility:      10             11             14
Volume:          133,813        131,879        127,484

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 1.9% above its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 4 periods.

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