British Pound: USD/GBP (GBP=X) possibility of recovery
Pound Sterling has fallen 4.0% against the U.S. Dollar over the course of May, with losses taking the exchange rate down from the May 03 high at 1.3177 down to the month low of 1.2559 recorded on the final day.
Declines are attributable to the Pound falling on heightened Brexit concerns, as the Conservative Party seeks to choose a new leader who likely to be a Brexiteer, increasing the probability of a ‘no deal’ Brexit.
The broader Dollar meanwhile put in a strong performance in a month that saw safe-haven currencies outperform as stock markets slid.
Concerning the outlook, from a technical point-of-view we see the pair is in an established downtrend and given the old adage ‘the trend is your friend’ we would normally expect declines to extend.
However, in this particular case the chart is showing some strong reversal indications which suggest the trend may be reversing and turning higher.
Thus although our overall forecast remains bearish it is heavily conditional on the market making new lows.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 1.28.
The projected upper bound is: 1.28.
The projected lower bound is: 1.25.
The projected closing price is: 1.26.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 18 white candles and 32 black candles for a net of 14 black candles.
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 34.6820. This is not an overbought or oversold reading. The last signal was a buy 6 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 31.42. 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 1 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 -77. This is not a topping or bottoming area. The last signal was a buy 1 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 15 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed up 0.000 at 1.263. Volume was 98% below average (consolidating) and Bollinger Bands were 45% wider than normal.
Open High Low Close Volume___
1.263 1.264 1.261 1.263 3,788
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.27 1.29 1.29
Volatility: 4 7 10
Volume: 133,521 152,013 174,777
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 2.4% below its 200-period moving average and is in an downward 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 moderate flows of volume out of GBP= (mildly bearish). Our trend forecasting oscillators are currently bearish on GBP= and have had this outlook for the last 13 periods.