British Pound: USD/GBP (GBP=X) downtrend remains in play

British Pound: USD/GBP (GBP=X) downtrend remains in play

British Pound: USD/GBP (GBP=X) downtrend remains in play

The bearish phase that started late last week (see update on 10 Aug, spot at 1.2825) is still clearly intact as GBP eked out a fresh low of 1.2704 yesterday. As highlighted on Monday (13 Aug, spot at 1.2760), while the current decline in GBP is oversold, further GBP weakness is still likely.

The low of 1.2704 was not far from the next ‘target’ of 1.2675 and a break of 1.2675 would shift the focus to 1.2590. All in, we continue to hold a bearish view until the ‘stop-loss’ level at 1.2840 is taken out (level was previously at 1.2880).

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 1.31.

The projected upper bound is: 1.28.

The projected lower bound is: 1.25.

The projected closing price is: 1.27.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 1 white candles and 8 black candles for a net of 7 black candles. During the past 50 bars, there have been 18 white candles and 31 black candles for a net of 13 black candles.

A doji star occurred (where a doji gaps above or below the previous candle). This often signals a reversal with confirmation occurring on the next bar.

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 13.4111. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 19 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 21.22. 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 34 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 -106.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 18 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 9 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed down -0.000 at 1.270. Volume was 94% below average (consolidating) and Bollinger Bands were 49% wider than normal.

Open High Low Close Volume___
1.269 1.270 1.269 1.270 9,273

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

Moving Averages: 10-period 50-period 200-period
Close: 1.28 1.31 1.36
Volatility: 4 8 9
Volume: 151,652 167,268 157,139

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 6.4% 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 moderate flows of volume out of GBP= (mildly bearish). Our trend forecasting oscillators are currently bearish on GBP= and have had this outlook for the last 21 periods. Our momentum oscillator is currently indicating that GBP= is currently in an oversold condition.

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