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British Pound News
GBP/USD rebounded on Tuesday on the enduring expectation that the EU and UK will ultimately agree a Brexit deal to save both from another economic shock on top of pandemic lockdowns .
That view persists as deal buzz among UK lawmakers comes after British Prime Minister Boris Johnson telling ministers a no-deal Brexit was most likely and Ireland’s Foreign Minister Simon Coveny said some slow progress was being mode on a key issue .
Monday and Tuesday’s lows attracted buyers near the rising 30-day moving average line, last at 1.3289. That’s after last week’s Brexit-angst-induced dive was reversed by the rising 55-day moving average line.
This month’s retreat from the 1.3540 trend high to its 1.3135 low looks like an ABC correction, one needed to reset overbought oscillators, which are now rising from neutral levels.
This bullish view would be confirmed if sterling closed above the 1.3476 B-wave high from Dec. 9 and September’s 1.3481 peak.
This and last year’s highs have all been close to 1.3500. If a reasonably comprehensive Brexit deal is reached, 38.2% and 50% Fibos of the 2014-2020 drop at 1.3621/4303 would be in play.
GBP/US Dollar Exchange Rate
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Overall, the bias in prices is: Upwards.
The projected upper bound is: 1.37.
The projected lower bound is: 1.32.
The projected closing price is: 1.35.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
A bearish harami occurred (where the current small black body is contained within an unusually large white body). During an uptrend (which appears to be the case with FOREX GBP=) this pattern implies an end to the rally as the bulls appear to have exhausted themselves.
During a downtrend the bearish harami pattern is bullish as the bulls appear to be gaining strength as the bears weaken.
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 80.8595. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 13 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 59.33. 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 85 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 7 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed down -0.002 at 1.344. Volume was 87% below average (consolidating) and Bollinger Bands were 43% narrower than normal.
Open High Low Close Volume 1.346 1.347 1.343 1.344 17,905
Technical Outlook Short Term: Neutral Intermediate Term: Bullish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 1.34 1.32 1.28 Volatility: 11 10 14 Volume: 123,323 145,365 135,201
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 5.4% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term.
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 45 periods.