British Pound: USD/GBP (GBP=X) Extends Recovery Above Major Resistance
The pound to dollar exchange rate is recovering higher this week after testing moving average support, boosted by a weaker dollar. GBP/USD was last seen nearing the 1.3000 handle after posting a low near 1.2870 in the early week.
GDP data from the UK released on Tuesday had little impact on the exchange rate as growth was flat in the fourth quarter which was largely expected. A recovery yesterday was held lower by a significant technical level at 1.2960 but the pair is seen scaling above it in early trading today.
A weaker dollar is aiding the pair in the current recovery. The US dollar index (DXY) has declined against five of its seven major counterparts in the week thus far. DXY turned lower yesterday, to end a six consecutive day rally, after trading at a fresh five-month high.
The session ahead might be a quiet one as the economic calendar is light. The main event to keep an eye on is Fed Chair Powell’s testimony to congress. The markets are not likely to react, similar to yesterday’s testimony, unless the Fed Chair alters his views from prior Fed communication.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 1.30.
The projected upper bound is: 1.32.
The projected lower bound is: 1.27.
The projected closing price is: 1.29.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.
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 56.2915. This is not an overbought or oversold reading. The last signal was a buy 1 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 44.85. 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 42 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 -55. This is not a topping or bottoming area. The last signal was a buy 2 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 8 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed down -0.001 at 1.295. Volume was 96% below average (consolidating) and Bollinger Bands were 32% narrower than normal.
Open High Low Close Volume___
1.296 1.296 1.295 1.295 4,032
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1.30 1.31 1.27
Volatility: 12 10 9
Volume: 96,723 98,517 112,771
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 2.1% above 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 24 periods.
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