British Pound: USD/GBP (GBP=X) 1.25 level will attract a lot of attention
The Euro went back and forth early on Monday, essentially deciding nothing. However, that is something worth paying attention to as we are hovering around the vital 1.25 level. This large, round, psychologically significant figure could be crucial in determining where we go next. That being the case, I am paying attention to the 1.25 level as a break down below that level could signal the next flush lower. That would be extraordinarily negative for the British pound.
If we don’t get some type of negative news, then it’s possible that this market could bounce a bit as this is an area that has been important more than once. We could reach all the way to the 1.2750 level, which would simply be a continuation of what we’ve seen lately. Ultimately, this is a market that I think continues to be a bit difficult, because even though we have the Federal Reserve on one side of the equation getting ready to cut rates, we also have the Brexit which of course seems to be going nowhere quick.
It’s quite possible that we simply see the market hang about in this consolidation area for some time, because not only do we have a lot of questions involving the Brexit, it is also a scenario where it’s the summertime, and quite frankly that’s more often than not a bit quiet.
With that being the case, consolidation is a very real threat as it were, so pay attention to this area. If we were to close below the 1.25 level significantly on a daily chart, then we drop 250 pips. Otherwise, if we can break above the highs of the Monday session, we could grind 250 pips to the upside.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 1.26.
The projected lower bound is: 1.24.
The projected closing price is: 1.25.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 19 white candles and 31 black candles for a net of 12 black 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 21.4151. This is not an overbought or oversold reading. The last signal was a buy 0 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 33.96. 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 buy 27 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 -114.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 14 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 4 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed up 0.001 at 1.252. Volume was 98% below average (consolidating) and Bollinger Bands were 15% narrower than normal.
Open High Low Close Volume___
1.251 1.252 1.251 1.252 3,677
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.26 1.27 1.29
Volatility: 4 6 10
Volume: 105,661 129,479 168,488
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 3.0% below 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 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 9 periods.