British Pound: USD/GBP (GBP=X) could drop to 1.20 in the event of a no deal

British Pound: USD/GBP (GBP=X) could drop to 1.20 in the event of a no deal

British Pound: USD/GBP (GBP=X) could drop to 1.20 in the event of a no deal

THE pound US dollar exchange rate is currently at around $1.290. It is down 0.3 per cent from today’s starting levels as fears of a ‘no-deal’ Brexit weigh heavily on the pound.

Markets have been spooked this week by comments from international trade secretary Liam Fox who suggested that there was now a 60 per cent chance of the UK leaving the EU without a new deal in place.

While most observers speculate that the odds aren’t quite that bad, a lack of progress in negotiations has done little to inspire confidence in the pound, which has fallen over 10 cents against the US dollar since April.

And there may be worse to come as well, with analysts forecasting that in the event of a ‘no-deal’ Brexit the pound US dollar exchange rate could fall as much as 10 per cent.

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 1.32.

The projected upper bound is: 1.30.

The projected lower bound is: 1.27.

The projected closing price is: 1.29.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 2 white candles and 8 black candles for a net of 6 black candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 black candles.

A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).

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 11.0632. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 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 29.42. 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 buy 29 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 -137.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 13 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 4 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed up 0.000 at 1.288. Volume was 93% below average (consolidating) and Bollinger Bands were 6% narrower than normal.

Open High Low Close Volume___
1.288 1.289 1.288 1.288 10,944

Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 1.30 1.32 1.36
Volatility: 6 8 9
Volume: 142,633 167,030 155,777

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 5.1% below its 200-period moving average and is in an downward 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 bearish on GBP= and have had this outlook for the last 16 periods. Our momentum oscillator is currently indicating that GBP= is currently in an oversold condition.

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