British Pound: USD/GBP (GBP=X) Gets Hammered On Monday

British Pound: USD/GBP (GBP=X) Gets Hammered On Monday

British Pound: USD/GBP (GBP=X) Gets Hammered On Monday

The British pound has gotten hammered during the trading session on Monday to kick off the week, slicing through the 50 day EMA. The uptrend line underneath should be supportive, as it coincides nicely with the crucial 1.30 level. At this point, the market is starting offer some value, and you should keep in mind that the market has recently made a “higher high”, but then the question now is whether or not the 1.30 level offers enough support to continue with a “higher low.”

All things been equal, I believe that the market probably continues to go higher, reaching towards 1.35 level. Most of the noise has been due to Boris Johnson suggesting that he was willing to walk away from the EU negotiations unless he gets a comprehensive deal. The expectations that he laid out was for the same type of deal Canada got with the EU, and if he does walk away then the deal between the United Kingdom and the European Union will default to the WTO agreement, meaning that tariffs could be part of the future. All things being equal though, it’s very likely this will be a short-term blip on the radar, because quite frankly the EU and the UK do not want some type of major tariff barriers between the two. At this point, it is more than likely only a matter of time before cooler heads prevail as the divorce has been made official in the last couple of sessions. At this point, it’s about making the best of the situation.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1.32.

The projected lower bound is: 1.28.

The projected closing price is: 1.30.

Candlesticks

During the past 10 bars, there have been 3 white candles and 6 black candles for a net of 3 black candles. During the past 50 bars, there have been 25 white candles and 24 black candles for a net of 1 white 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 36.5169. This is not an overbought or oversold reading. The last signal was a sell 22 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 45.11. 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 35 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 -123.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 1 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 1 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed down -0.000 at 1.299. Volume was 100% below average (consolidating) and Bollinger Bands were 53% narrower than normal.

Open     High      Low     Close     Volume___
1.299 1.300 1.299 1.299 330
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1.31 1.31 1.27
Volatility: 12 10 10
Volume: 93,178 97,259 113,842

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 2.3% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 17 periods.

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