British Pound: USD/GBP (GBP=X) Brexit versus Socialism

British Pound: USD/GBP (GBP=X) Brexit versus Socialism

British Pound: USD/GBP (GBP=X) Brexit versus Socialism

Prime Minister Boris Johnson called a snap election in October after parliament blocked his Brexit deal. Johnson saw an election as a means to end to get Parliament out of the gridlock created by the loss of his majority.

The British PM lost his majority following Parliament’s returned from summer recess after he purged members of the party that supported the opposition.

If Johnson gets his majority now, he intends to push forward the deal that is on the table by the end of next month. The Labour party, on the other hand, wants to renegotiate the deal and put the new negotiation up for a vote.

While the sole purpose of the election, from Johnson’s eyes at least, is to stop the endless Brexit delays, not all UK citizens see it that way. For the many that have grown tired of hearing about Brexit since the referendum three years ago, today’s vote is about electing a government that will serve its people. In this context, Johnson may have over estimated how big a priority Brexit is for the broader public. In contrast, the Labour party’s election message has largely focused on the state of public services.

The markets argue otherwise, placing a great deal of importance on a Brexit deal. An increasing conviction that Johnson will win a majority and get Brexit done, and a decline in chances of a no-deal Brexit, has pushed the pound to dollar exchange rate up 10% from lows in September. At the same time, with the markets driving Sterling higher in the past few months, the risk appears to the downside in the event of a hung Parliament.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 1.28.

The projected upper bound is: 1.34.

The projected lower bound is: 1.30.

The projected closing price is: 1.32.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 28 white candles and 20 black candles for a net of 8 white 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 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 74.0114. This is not an overbought or oversold reading. The last signal was a sell 0 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 70.61. This is where it usually tops. 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 37 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 73. This is not a topping or bottoming area. The last signal was a sell 1 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 buy 6 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed down -0.002 at 1.317. Volume was 7% above average (neutral) and Bollinger Bands were 0% wider than normal.

Open     High      Low     Close     Volume___
1.320 1.323 1.305 1.317 117,728
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1.31 1.29 1.27
Volatility: 6 10 9
Volume: 96,078 104,116 128,357

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 3.8% above its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 3 periods. Our momentum oscillator is currently indicating that GBP= is currently in an overbought condition.

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