British Pound: USD/GBP (GBP=X) Breaks Higher

British Pound: USD/GBP (GBP=X) Breaks Higher

British Pound: USD/GBP (GBP=X) Breaks Higher

The British pound broke higher during the trading session on Friday, as we broke well above the 1.30 level. At this point it looks as if the British pound is going to continue to find buyers going forward, as the market has found quite a bit of support at the 50 day EMA. Ultimately though, I think it will be very noisy and choppy, but it has more of an upward slope to it longer term. The bullish flag of course has offered support as I anticipated, and the bullish flag suggests that we will get a move to the 1.38 handle. That being said though, I am going to look at pullbacks as a buying opportunity.

To the upside, I believe that the 1.3250 level will be resistive, and most certainly the 1.35 level will be. We have recently bounce from the 38.2% Fibonacci retracement level, and that of course will attract a certain amount of attention in and of itself. The fact that we only pull back to the 38.2% Fibonacci retracement level suggests that there is a lot of bullish pressure underneath and that the momentum will continue to be very strong. At this point in time though, I do believe that looking for value in the British pound will be the way to go going forward. Buying the dips continues to be how I plan on testing this market, and I believe that the 1.30 level will attract a lot of attention but I would be more willing to simply by little bits and pieces on pullbacks to build up a larger position than anything else.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 1.33.

The projected lower bound is: 1.29.

The projected closing price is: 1.31.

Candlesticks

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 26 white candles and 22 black candles for a net of 4 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 74.1238. This is not an overbought or oversold reading. The last signal was a buy 2 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 55.49. 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 9 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 -7. This is not a topping or bottoming area. The last signal was a buy 2 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 sell 8 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed up 0.001 at 1.309. Volume was 98% below average (consolidating) and Bollinger Bands were 7% narrower than normal.

Open     High      Low     Close     Volume___
1.306 1.309 1.306 1.309 1,913
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1.30 1.30 1.27
Volatility: 11 8 9
Volume: 83,740 98,344 122,796

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 3.2% above its 200-period moving average and is in an downward 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 bearish on GBP= and have had this outlook for the last 3 periods.

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