British Pound: USD/GBP (GBP=X) Brexit, PMI Numbers and Trade Talks in Focus
On the Macro
For the Dollar:
Key stats include December durable goods orders, February’s Philly FED Manufacturing Index, prelim U.S private sector PMI numbers and existing home sales figures all due out on Thursday. An upward trend in the weekly jobless claims figures has also made the Dollar more sensitive to the weekly figures.
The FOMC meeting minutes on Wednesday and FOMC member commentary will also be in focus.
The Dollar Spot Index ended the week up by 0.29% to $96.916.
For the EUR:
Stats include economic sentiment numbers due out of Germany on Tuesday and Eurozone consumer confidence numbers on Wednesday in a quiet start to the week. A busy Thursday includes prelim February private-sector PMI numbers out of France, Germany, and the Eurozone. At the end of the week, finalized GDP numbers and business sentiment figures are due out of Germany. Finalized January inflation numbers are also due out during the week, with Friday’s Eurozone figures of greater influence.
Outside of the numbers, the ECB will release its monetary policy meeting minutes on Thursday.
The EUR/USD ended the week down by 0.24% to $1.1296.
For the Pound:
It’s a quiet week ahead, with stats limited to employment figures on Tuesday and CBI Industrial Trend Orders on Wednesday. The employment figures will be the key driver on the data front.
Outside the numbers, Brexit chatter will continue to overshadow the economic calendar through the week.
The GBP/USD ended the week down 0.42% at $1.2889.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1.31.
The projected lower bound is: 1.27.
The projected closing price is: 1.29.
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 25 white candles and 25 black candles.
An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend (which appears to be the case with FOREX GBP=). It then signifies that the momentum may be shifting from the bears to the bulls.
If the engulfing bullish pattern occurs during an uptrend, it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.
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 31.2390. This is not an overbought or oversold reading. The last signal was a buy 1 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 47.98. 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 sell 14 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 -86. This is not a topping or bottoming area. The last signal was a buy 0 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 9 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed up 0.008 at 1.289. Volume was 8% below average (neutral) and Bollinger Bands were 4% wider than normal.
Open High Low Close Volume___
1.281 1.290 1.278 1.289 170,680
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.29 1.28 1.30
Volatility: 8 10 10
Volume: 162,758 171,489 178,159
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 0.9% below its 200-period moving average and is in an downward trend. Volatility is low 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.