British Pound: USD/GBP (GBP=X) further downside potential

British Pound: USD/GBP (GBP=X) further downside potential

British Pound: USD/GBP (GBP=X) further downside potential

The Pound recorded its ninth consecutive weekly loss against the Euro ahead of the weekend, and it recorded its lowest weekly close against the U.S. Dollar since April 2017.

The weakness extends to the majority of major currencies, as a multi-week sell-off extended amidst a combination of political uncertainty and deteriorating economic data continues to weigh.

For Sterling, it’s not just the Brexit deal/’no deal’ equation that is injecting confidence-sapping uncertainty into the market: the prospect of a General Election is another factor at play with news that the Conservative party are gearing for a General Election before the year is out. 

This is news that will do little to boost confidence in the UK currency.

The Financial Times reported Friday that “Conservative MPs are spending the summer preparing for a snap general election, claiming that if Boris Johnson becomes prime minister he will either be forced to go the polls or decide to take a gamble to increase his majority.”

Even in pre-Brexit times, impending elections did tend to inject uncertainty into the market and contribute to underperformance by Sterling.

Overall, the bias in prices is: Downwards.

The projected upper bound is: 1.27.

The projected lower bound is: 1.24.

The projected closing price is: 1.25.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 20 white candles and 30 black candles for a net of 10 black candles.

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 19.3436. 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 34.43. 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 26 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 -132.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 3 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed up 0.000 at 1.253. Volume was 98% below average (consolidating) and Bollinger Bands were 20% narrower than normal.

Open High Low Close Volume___
1.252 1.253 1.251 1.253 2,312

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

Moving Averages: 10-period     50-period     200-period
Close: 1.26 1.27 1.29
Volatility: 4 7 10
Volume: 106,584 130,322 168,862

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 2.9% 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 8 periods.

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