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British Pound: USD/GBP (GBP=X) oversold marginally likely to continue

British Pound: USD/GBP (GBP=X) oversold marginally likely to continue

The Pound-to-Dollar exchange rate is trading at 1.2714 at the start of the new trading week after collapsing over 2.2% in the week before.

The decline came as a result of the collapse of cross-party Brexit talks which had promised to deliver a possible softer ‘customs-union’ Brexit but failed, while markets are preparing for the resignation of Prime Minister Theresa May and expressing caution that she will be replaced by someone more ‘hawkish’ on Brexit.

From a technical perspective, GBP/USD has established a short-term downtrend which is, on balance, more likely to extend than not given the assumption that the “trend is your friend” and therefore biased to continue.

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 1.30.

The projected upper bound is: 1.29.

The projected lower bound is: 1.25.

The projected closing price is: 1.27.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 2 white candles and 8 black candles for a net of 6 black candles. During the past 50 bars, there have been 19 white candles and 31 black candles for a net of 12 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 4.2353. 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 29.63. 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 sell 57 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 -145.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 9 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 5 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed up 0.001 at 1.273. Volume was 99% below average (consolidating) and Bollinger Bands were 16% wider than normal.

Open High Low Close Volume___
1.272 1.275 1.272 1.273 899

Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 1.29 1.31 1.30
Volatility: 4 10 10
Volume: 124,107 160,217 175,992

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 1.7% below its 200-period moving average and is in an downward trend. Volatility is 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 3 periods. Our momentum oscillator is currently indicating that GBP= is currently in an oversold condition.

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