British Pound: USD/GBP (GBP=X) BoE Governor Mark Carney testifies about inflation and the economic outlook before the Treasury Committee
GBP/USD is showing little movement on Monday. In the North American session, the pair is trading at 1.2740, up 0.20% on the day. The pair dropped 2.2% last week, its sharpest weekly loss since October 2017. On the release front, British CB Leading Index posted a gain of 0.5%, after a decline of 0.4% in the previous release. There are no U.S. data events on the schedule. On Tuesday, BoE Governor Mark Carney testifies about inflation and the economic outlook before the Treasury Committee. The U.K. will release CBI Industrial Order Expectations and the U.S. posts existing home sales.
U.S. numbers impressed late in the week, and the positive news was spread across the economy. The Philly Fed Manufacturing Index jumped to 16.6, up from 8.5 a month earlier. Unemployment claims dropped to 212 thousand, marking a 4-week high. The week ended with a sizzling release from UoM Consumer Sentiment, which climbed to 102.4, its highest level in 15 years.
Brexit has been on the backburner for several weeks, but will be back on center stage in early June. Parliament is expected to vote yet again on a Brexit withdrawal agreement, after three previous attempts by the May government ended in failure. It’s difficult to see why the result will be any different this time around, as Conservative lawmakers remain deeply divided on Brexit. May tried to enlist the help of Labor leader Jeremy Corbyn, but these talks have been unproductive. The next Brexit vote in parliament will be May’s last chance before the summer recess, and her days as prime minister may be numbered.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 1.30.
The projected upper bound is: 1.29.
The projected lower bound is: 1.25.
The projected closing price is: 1.27.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 2 white candles and 8 black candles for a net of 6 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 long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
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 3.7648. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 10 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 29.16. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 57 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 -146.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 9 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 5 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed up 0.001 at 1.273. Volume was 38% below average (neutral) and Bollinger Bands were 16% wider than normal.
Open High Low Close Volume___
1.272 1.276 1.271 1.273 104,227
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.29 1.31 1.30
Volatility: 4 10 10
Volume: 134,440 162,283 176,509
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 1.8% below its 200-period moving average and is in an downward trend. Volatility is Our volume indicators reflect moderate flows of volume out of GBP= (mildly bearish). Our trend forecasting oscillators are currently bearish on GBP= and have had this outlook for the last 3 periods. Our momentum oscillator is currently indicating that GBP= is currently in an oversold condition.