British Pound: USD/GBP (GBP=X) Buy On Dips Prior To Brexit According To Prominent Economist in Asia

Shayne Heffernan, CEO and Founder of HEFFX has issued a warning to the U.S. Dollar bulls. The prominent economist in Asia says that the era of the U.S. dollar may be coming to an end and he is forecasting a 30% decline soon in the U.S. currency against it’s major rivals, citing increases in the nation’s deficit and dwindling savings.

Shayne Heffernan says that the rise of China and the decoupling of the U.S. from its trade partners is setting the stage for a dramatic weakening of the U.S. currency in the next few years that is likely to end the supremacy of the monetary unit as the world’s reserve currency.

The dollar could fall very sharply he mentioned in a note today.

One measure of the U.S. Dollar, the ICE U.S. Dollar Indux has been weakening over the past 30 days, down 2.77% but is up slightly on the year, according to the Metastock and Thomson Reuters financial tools.

A weaker dollar has implications for assets and the stock market, including the Dow Jones Industrial Average with most debts denominated in U.S. Dollars. In addition, a majority of cross-border financing and international trades are conducted in U.S. Dollar.

Tonight, UK Claimant Counts and Unemployment, along with US Retail Sales and Industrial Production are the highlights of the session. In the UK, claimant counts are expected to halve to around 400,000, with unemployment rising to about 5.0%.

Any fallout is likely to be limited to Sterling though. US Retail Sales are forecast to recover to 8.0% from a 16.40% drop last week. Industrial Production is expected to improve to 2.90% MoM but remain lower by 18.0% YoY.

The EUR/USD has risen 0.80% in the past 12 hours to 1.1340 in Asia and looks set to retest 1.1400. GBP/USD rose 0.50% in New York, and is 0.50% higher Asian in Asia at 1.2665, and looks set to retest its 200-day moving average at 1.2685. Gains in the Pound may be limited by nerves over Brexit talks, however.

Shayne Heffernan Trade Idea

“We suggest buy the British Pound on dips and accumulate into July and hold until September.”

Economic Events

FX Polls

Sterling/US Dollar Exchange Rate

Today’s Forex Rates

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 1.25.

The projected upper bound is: 1.28.

The projected lower bound is: 1.24.

The projected closing price is: 1.26.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 28 white candles and 21 black candles for a net of 7 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).

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.

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 38.5518. This is not an overbought or oversold reading. The last signal was a sell 4 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 55.58. 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 4 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 -17. This is not a topping or bottoming area. The last signal was a sell 4 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 1 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed unchanged at 1.257. Volume was 58% below average (consolidating) and Bollinger Bands were 6% narrower than normal.

Open    High     Low     Close     Volume
1.257   1.258    1.254   1.257     54,396

Technical Outlook
Short Term:        Neutral
Intermediate Term: Bullish
Long Term:         Bearish

Moving Averages: 10-period     50-period       200-period
Close:           1.26          1.24            1.27
Volatility:      9             11              14
Volume:          140,421       126,495         115,448

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 0.9% below 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 11 periods.

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HEFFX

HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.

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