British Pound: USD/GBP (GBP=X) focus on is at 1.2790
We first highlighted the possibility of a move to 1.2920/25 last Friday (19 Oct, spot at 1.3020) wherein we indicated a “break of 1.3000 would shift the focus to 1.2920/25”. The price action since then is line with our expectation even though the ease of which the strong 1.2920/25 level was taken out came as a surprise.
We noted yesterday (24 Oct, spot at 1.2985), “looking ahead, a break of 1.2920/25 would suggest GBP is ready to tackle next support at 1.2870”. It seems that we have underestimated the strength of the current weakness as GBP plummeted to an overnight low of 1.2867. At this stage, there is no sign that GBP is ready for a bottom just yet and the next level to focus on is at 1.2790. All in, we continue to expect GBP to stay under pressure until it can reclaim the ‘key resistance’ at 1.2990 (level previously at 1.3080).
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 1.30.
The projected upper bound is: 1.30.
The projected lower bound is: 1.26.
The projected closing price is: 1.28.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white 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 9.8796. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 8 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 35.68. 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 buy 48 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 -180.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 9 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 5 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed down -0.006 at 1.282. Volume was 17% above average (neutral) and Bollinger Bands were 14% wider than normal.
Open High Low Close Volume___
1.288 1.292 1.280 1.282 204,995
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.30 1.30 1.35
Volatility: 9 10 9
Volume: 191,866 177,911 173,101
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 4.8% below its 200-period moving average and is in an downward trend. Volatility is high 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 5 periods.