British Pound: USD/GBP (GBP=X) may face a more bearish fate over the coming days
The British Pound may face a more bearish fate over the coming days as Prime Minister Boris Johnsonremains adamant that the UK will depart from the European Union (EU) no later than the October 31 deadline, with the new leader hopeful that “our friends and partners will show common sense and that they will compromise.”
The comments suggest Mr. Johnson will make a hard push to renegotiate with less than 100 days till the deadline, but little indications of a potential trade deal may become a growing concern for the BoE as “the appropriate path of monetary policy will depend on the balance of the effects of Brexit.”
In turn, the Monetary Policy Committee (MPC) may adopt a dovish tone at the next meeting on September 19, and fresh data prints coming out of the economy may push the central bank to alter the forward guidance for monetary policy as “underlying growth appears to have slowed since 2018 to a rate below potential.”
The BoE may turn a blind eye to the UK employment report even though the economy is anticipated to add 107K jobs in June as the Consumer Price Index (CPI) is expected to slow to 1.9% from 2.0% per annum, while Retail Sales are projected to contract 0.2% in July.
Signs of a less robust economy may produce headwinds for the British Pound as it encourages the BoE to switch gears in 2019, but retail positions remain skewed even though GBPUSD trades near the yearly-low (1.2079).
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 1.24.
The projected upper bound is: 1.22.
The projected lower bound is: 1.19.
The projected closing price is: 1.20.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
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 16.3966. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 5 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 26.43. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 4 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 -94. This is not a topping or bottoming area. The last signal was a buy 5 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 11 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed up 0.002 at 1.205. Volume was 99% below average (consolidating) and Bollinger Bands were 86% wider than normal.
Open High Low Close Volume___
1.205 1.207 1.204 1.205 1,655
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.21 1.25 1.28
Volatility: 6 8 10
Volume: 110,813 119,534 159,721
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 6.0% 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 24 periods. Our momentum oscillator is currently indicating that GBP= is currently in an oversold condition.