British Pound News
With market risk appetite elevated by the agreement of a UK-EU trade deal and US fiscal stimulus the Pound to US Dollar (GBP/USD) exchange rate found some support.
As safe-haven demand generally diminished in the face of reduced uncertainty the US Dollar (USD) fell out of favour with investors.
Although the $900 billion stimulus spending package looks set to offer a boost to the flagging US economy this failed to encourage USD exchange rate gains, given the prevailing mood of investor optimism.
Even so, as the relief that greeted the UK-EU trade deal news faded over the bank holiday this limited the potential for fresh Pound Sterling (GBP) gains today.
While the risk of a no-deal Brexit scenario is no longer on the table the potential for substantial economic disruption remains, to the detriment of GBP exchange rates.
With many businesses still appearing unprepared for the end of the Brexit transition period at the end of December markets remain wary of fresh damage to come.
Uncertainty over the details concerning the future trade of the financial services sector also put a dampener on the Pound, given that the sector accounts for a significant portion of the UK gross domestic product.
As tightened Covid-19 restrictions also appear set to weigh on economic growth in the coming weeks there appeared little room for Pound gains at this stage.
However, the GBP/USD exchange rate may gain further traction on Wednesday with the release of November’s US advance goods trade balance figure.
Forecasts point towards the goods deficit widening from -$80.4 billion to -$83 billion last month, reflecting a continued deterioration in US trade conditions.
A widened deficit could give investors fresh incentive to sell out of the US Dollar, adding to the general sense of market risk appetite.
With trade conditions appearing unlikely to experience a major turnaround in the near future, given the ongoing impact of the Covid-19 crisis, a negative showing here could weigh heavily on USD exchange rates.
Another major source of US Dollar volatility in the final trading week of the year looks set to come on the back of the latest jobless claims data.
If the initial jobless claims figure shows another weekly uptick this could offer the GBP/USD exchange rate a fresh boost.
As long as the US labour market continues to show signs of weakness in the face of Covid-19 disruption support for the US Dollar appears unlikely to return.
Although the agreed fiscal stimulus package could help to stem the impact of rising unemployment in the early months of 2021 any fresh increase in jobless claims could still put significant pressure on USD exchange rates this week.
GBP/US Dollar Exchange Rate
Today’s Forex Rates
GBP/US Dollar FX Polls
Overall, the bias in prices is: Upwards.
The projected upper bound is: 1.38.
The projected lower bound is: 1.33.
The projected closing price is: 1.35.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
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 52.9564. This is not an overbought or oversold reading. The last signal was a sell 7 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 58.01. 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 95 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 2 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed up 0.004 at 1.354. Volume was 76% below average (consolidating) and Bollinger Bands were 15% narrower than normal.
Open High Low Close Volume 1.350 1.354 1.349 1.354 34,571
Technical Outlook Short Term: Neutral Intermediate Term: Bullish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 1.35 1.33 1.28 Volatility: 11 10 11 Volume: 126,246 144,714 134,903
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 5.5% above its 200-period moving average and is in an upward trend. Volatility is 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 55 periods.