British Pound: USD/GBP (GBP=X) Benefits From Increasing Worries Over Impact of US-China Trade War

British Pound: USD/GBP (GBP=X) Benefits From Increasing Worries Over Impact of US-China Trade War

British Pound: USD/GBP (GBP=X) Benefits From Increasing Worries Over Impact of US-China Trade War

If the US trade deficit is found to have widened on the month, this could see USD exchange rates extending their downtrend tonight.

Once it becomes clear how China will retaliate to the latest proposed US tariffs worries over the outlook of the US economy could increase, with inflationary pressure already looking set to push higher in the months ahead.

Further Pound Sterling US Dollar (GBP/USD) Exchange Rate Volatility Likely on US Budget Statement

Ahead of this evening’s US monthly budget statement the Pound Sterling to US Dollar (GBP/USD) exchange rate continued to recover ground,

However, as forecasts point towards a narrowing of the budget deficit in June this could see the US Dollar (USD) return to a stronger footing overnight.

Any narrowing of the deficit is likely to encourage confidence among investors, in spite of lingering uncertainty over the impact of the Trump administration’s trade policies.

Pound Sterling US Dollar (GBP/USD) Exchange Rate Climbs as US Inflation Outpaces Wages

A fresh uptick in the US consumer price index was not enough to prevent the Pound Sterling to US Dollar (GBP/USD) exchange rate gaining ground on Thursday.

While the headline CPI climbed to 2.9% on the year, hitting a six-year high, this failed to galvanise much additional support for the US Dollar (USD).

The figure saw inflation outpacing wage growth in June, with average weekly earnings having risen 2.7% in the same month.

As the escalating trade dispute with China is expected to push prices still higher over the coming months US households look set to come under increased pressure.

Although this paves the way for the Federal Reserve to raise interest rates at a faster pace, this prospect did not offer any encouragement to USD exchange rates.

Overall, the bias in prices is: Downwards.

The projected upper bound is: 1.33.

The projected lower bound is: 1.30.

The projected closing price is: 1.32.

Candlesticks

A black body occurred (because prices closed lower 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 24 white candles and 25 black candles for a net of 1 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 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 11.8079. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 4 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 43.98. 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 10 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 1. This is not a topping or bottoming area. The last signal was a buy 10 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 8 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed down -0.000 at 1.320. Volume was 99% below average (consolidating) and Bollinger Bands were 52% narrower than normal.

Open High Low Close Volume___
1.320 1.321 1.320 1.320 1,645

Technical Outlook
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 1.32 1.33 1.36
Volatility: 6 7 9
Volume: 154,106 163,919 151,642

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 2.8% below its 200-period moving average and is in an upward trend. Volatility is high 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 3 periods.

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