British Pound: USD/GBP (GBP=X) looks to extend its rebound off multi-year lows
GBP prices jumped 1% on balance over the past 5 trading days measured via the BXY British Pound Currency Index. Last week’s rebound in the Sterling snapped a 4-week losing streak as GBP/USD and EUR/GBP bounce off technical confluence levels dating back multiple years. Looking ahead, the British Pound could continue clawing back some its downside if Brexit uncertainty – quantified by BPVIX, Cboe’s 30-day implied British Pound volatility index – fades from its recent runup.
That said, a sustained retracement for GBP prices could be in the cards over the near-term with the return of the generally inverse correlation between the British Pound and BPVIX as expected volatility recedes. Also, the positive tailwind from better-than-expected UK economic data could alleviate GBP selling pressure while no-deal Brexit risks take the backseat with Parliament on recess next week.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 1.24.
The projected upper bound is: 1.23.
The projected lower bound is: 1.20.
The projected closing price is: 1.22.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 black candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 75.5710. This is not an overbought or oversold reading. The last signal was a buy 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 41.61. 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 2 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 68. This is not a topping or bottoming area. The last signal was a buy 10 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 buy 2 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed up 0.001 at 1.216. Volume was 99% below average (consolidating) and Bollinger Bands were 41% wider than normal.
Open High Low Close Volume___
1.215 1.216 1.214 1.216 920
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.21 1.24 1.28
Volatility: 7 8 9
Volume: 105,328 117,339 157,649
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 4.9% 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 29 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.