British Pound Outlook
The Pound-to-Dollar rate has broken higher from a narrow August range and is now targeting December’s election rally highs amid an unravelling of the U.S. greenback, although lingering Brexit uncertainties, U.S. economic resilience and the oversold nautre of the Dollar could slow Sterling’s ascent.
Dollars were sold en masse after the Federal Reserve (Fed) said on Thursday it will deliberately foster above-target inflation and that interest rates will still remain pinned to the floor as price pressures rise. Previously above-target inflation could’ve been likely to incite an interest rate rise but now the Fed says it will leave rates at record lows to actively foster above-target inflation in order to make amends for past as well as present periods where the bank has fallen short of the objective for 2% price growth.
The policy shift was in line with what many analysts were expecting but implies further falls in the ‘real’ bond yields, or inflation-adjusted returns earned by investors, that were widely cited as being behind declines in the Dollar over recent months as well as late last week. Investors’ extreme bearishness on the Dollar, combined with Sterling’s earlier underperformance, have left the Pound-to-Dollar rate in an idea position to rally.
GBP/US Dollar Exchange Rate
Today’s Forex Rates
GBP/US Dollar FX Polls
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 1.36.
The projected lower bound is: 1.32.
The projected closing price is: 1.34.
A white body occurred (because prices closed higher 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 31 white candles and 19 black candles for a net of 12 white candles.
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 87.8505. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 19 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 68.67. 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 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 199.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 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 0 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed up 0.001 at 1.336. Volume was 93% below average (consolidating) and Bollinger Bands were 26% narrower than normal.
Open High Low Close Volume 1.334 1.337 1.334 1.336 8,373
Technical Outlook Short Term: Overbought Intermediate Term: Bullish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 1.32 1.28 1.27 Volatility: 14 9 14 Volume: 110,092 121,121 119,710
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 4.9% 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 28 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.
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