British Pound: USD/GBP (GBP=X) Left Flat as Fed Pauses Easing Cycle

British Pound: USD/GBP (GBP=X) Left Flat as Fed Pauses Easing Cycle

British Pound: USD/GBP (GBP=X) Left Flat as Fed Pauses Easing Cycle

The Pound Sterling US Dollar (GBP/USD) exchange rate was left muted, with the pairing currently trading at an inter-bank rate of $1.2947.

The US Federal Reserve’s meeting minutes revealed that policymakers decided to pause its easing cycle following an October rate cut, and it was in no hurry to reassess the path of rates.

Commenting on the Federal Open Market Committee meeting minutes, Head of Americas Fundamental Fixed Income at BlackRock Inc. Bob Miller noted:

‘The committee intends to keep rates on hold for the time being. After three consecutive rate reductions, the mid-cycle adjustment is over. Beyond that new information contained in these minutes was limited.’

However, now that the Fed has paused its easing cycle, the safe-haven Dollar is likely to benefit from any US-China-related jitters which previously caused USD to slump.

The Pound was left flat against the Dollar on Thursday as the upcoming December election remained the main focus of investors.

GBP was left muted thanks to a better-than-expected performance in Tuesday evening’s debate by the Labour leader, Jeremy Corbyn.

Following the debate, a snap poll from YouGov revealed it was a ‘dead heat’ as 51% of those asked supported current Prime Minster, Boris Johnson whereas 49% backed Corbyn.

Analysts believed this result was more favourable for the opposition leader, and commenting on this, Deutsche Bank analysts noted:

‘Given how far Corbyn’s personal ratings are below Johnson’s and how far Labour are behind in the polls, then such a split could be seen as a small victory for the opposition.’

However, Sterling was not far from six-month highs as polls continued to show the Conservatives were ahead of Labour and there would need to be a significant shift in opinion to push GBP out of the current ranges.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 1.31.

The projected lower bound is: 1.27.

The projected closing price is: 1.29.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 4 black candles for a net of 1 white candles. During the past 50 bars, there have been 24 white candles and 24 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 52.9276. This is not an overbought or oversold reading. The last signal was a sell 2 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 58.53. 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 22 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 79. This is not a topping or bottoming area. The last signal was a sell 2 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 17 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed down -0.002 at 1.290. Volume was 13% below average (neutral) and Bollinger Bands were 64% narrower than normal.

Open     High      Low     Close     Volume___
1.292 1.297 1.289 1.290 98,617
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1.29 1.27 1.27
Volatility: 5 11 10
Volume: 94,012 108,205 133,947

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 1.5% above its 200-period moving average and is in an upward 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 bullish on GBP= and have had this outlook for the last 28 periods.

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