British Pound: USD/GBP (GBP=X) Breaks Through Major Figure
The British pound initially tried to rally during the trading session on Wednesday but then gave back all of the gains and sliced through the 1.20 level to show signs of weakness yet again. The fact that we have sliced through the 1.20 level shows you just how weak this pair has become, as traders are starting to punish the United Kingdom for its smaller allocation of funds to fight the coronavirus. The reality is that the US dollar is the most favored currency around the world right now, and that of course is going to show itself here. Furthermore, the British pound is also going through the entire Brexit process, so that adds a bit of skepticism here as well.
All that being said though, the market is a bit oversold so it’s difficult to start shorting here. I would wait for a bounce to at least the 1.20 level, if not higher based upon some type of relief rally. Selling down here is simply chasing the trade, and that’s a great way to lose money. If the market rallies towards the 1.20 level and fails, then it’s a nice selling opportunity. Remember that relief rallies can be quite vicious, so the last thing you need to do is get caught in one by trying to short at the extreme lows that we find ourselves in. However, if you can find British pound charts that are less oversold than this one, you may be able to take advantage of the weakness in those markets.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 1.27.
The projected upper bound is: 1.19.
The projected lower bound is: 1.13.
The projected closing price is: 1.16.
During the past 10 bars, there have been 2 white candles and 7 black candles for a net of 5 black candles. During the past 50 bars, there have been 20 white candles and 29 black candles for a net of 9 black candles.
A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).
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 10.2520. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 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 17.58. 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 67 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 -166.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 7 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 0.000 at 1.162. Volume was 89% below average (consolidating) and Bollinger Bands were 360% wider than normal.
Open High Low Close Volume___
1.162 1.167 1.150 1.162 11,976
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.24 1.29 1.27
Volatility: 26 17 12
Volume: 124,853 112,191 110,837
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 8.5% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 49 periods. Our momentum oscillator is currently indicating that GBP= is currently in an oversold condition.