British Pound: USD/GBP (GBP=X) Gapped Lower to Kick Off The Week
The British pound has gapped lower to kick off the trading session on Monday, rally from there, and then pulled back as Bank of England members are now suggesting that a rate cut is possible. Having said that though, the Federal Reserve also looks likely to cut rates to fight the economic damage done by the coronavirus, so therefore it’s very likely that we continue to see a lot of noisy trading to say the least and it will be very choppy. The 50% Fibonacci retracement level is just below, so there is a certain amount of technical support, not to mention the fact that the 200 day EMA is just below there.
With that, I would anticipate that a bounce makes sense, unless of course the Bank of England actually does something to act, or if the Federal Reserve walks back Jerome Powell’s statement later on Friday. Neither looks very likely, so at this point this is going to be a very choppy and volatile pair but could very well find itself rallying just due to the fact that it had sold off so much recently.
If the market was to break down below the 200 day EMA though, things change in the market could go looking towards the 1.25 level given enough time. Underneath there, the pair collapses and goes much lower. Ultimately, I think we are probably looking at a range bound move until we get some type of impulsive candlestick that we can follow. Until then, this is going to be very difficult pair to trade in my estimation.
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 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 22 white candles and 28 black candles for a net of 6 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 18.7856. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 10 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 36.84. 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 55 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 -161.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 7 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 up 0.002 at 1.277. Volume was 92% below average (consolidating) and Bollinger Bands were 12% narrower than normal.
Open High Low Close Volume___
1.275 1.277 1.274 1.277 7,919
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1.29 1.30 1.27
Volatility: 9 9 10
Volume: 107,428 101,284 111,313
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 0.5% above its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 37 periods.