British Pound: USD/GBP (GBP=X) Brexit uncertainty and turmoil continue
GBP/USD dropped over 1.3% last week, as Brexit uncertainty and turmoil continue. We’ll get a snapshot of the health of the British economy, with the release of PMI reports. Here is an outlook for the highlights of this week and an updated technical analysis for GBP/USD.
Prime Minister May has been unable to pass her withdrawal agreement through parliament, despite three attempts to do so. There was plenty of drama in Whitehall, when lawmakers rejected eight alternative options to the Brexit withdrawal agreement. This worsened the deadlock over Brexit, as parliament has rejected a no-deal exit, but at the same time, has rejected all other options. Not surprisingly, the pound responded with sharp losses last week. The new Brexit deadline is April 12, but it remains uncertain if parliament will change its mind and approve May’s withdrawal deal.
In the U.S., growth remains respectable, but the economy has slowed down. Final GDP disappointed with a gain of 2.2%, compared to the initial reading of 2.6%. Personal spending posted a weak gain of 0.1%, and CB consumer confidence fell to 124.1, down sharply from 131.4 in the previous release.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1.33.
The projected lower bound is: 1.28.
The projected closing price is: 1.30.
A black body occurred (because prices closed lower 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 20 white candles and 28 black candles for a net of 8 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.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 31.6582. This is not an overbought or oversold reading. The last signal was a buy 14 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 43.33. 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 21 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 -165.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 20 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 6 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed down -0.001 at 1.303. Volume was 11% above average (neutral) and Bollinger Bands were 17% narrower than normal.
Open High Low Close Volume___
1.304 1.313 1.298 1.303 199,574
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1.32 1.31 1.30
Volatility: 9 11 11
Volume: 179,514 175,687 179,845
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 0.4% above 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 12 periods.
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