British Pound: USD/GBP (GBP=X) price under pressure as UK services suffer from ‘worst spell’ since 2009

British Pound: USD/GBP (GBP=X) price under pressure as UK services suffer from ‘worst spell’ since 2009

British Pound: USD/GBP (GBP=X) price under pressure as UK services suffer from ‘worst spell’ since 2009

The pound was left muted against the US dollar today, as data showed the UK service sector stagnated, with the pairing currently trading at around $1.287.

The pound edged slightly higher against the US dollar on Tuesday, although any gains were limited by election uncertainty, weak PMI readings and a looming Bank of England (BoE) monetary policy meeting. Data released this morning showed the UK services sector struggling in October as new business fell for the second month in a row, with Brexit uncertainty blamed for dragging the country’s largest sector down to its lowest level in a decade. Commenting on the data, Markit’s Chief Business Economist, Chris Williamson said: “The UK PMI surveys collectively indicated a further overall decline in private sector output in October. Contractions have now been recorded in four of the past five months, marking the worst spell since 2009 during the global financial crisis.”

Looking ahead to Thursday, the pound could be left under pressure following the BoE interest rate decision. 

While the bank is expected to leave rates unchanged, Sterling could edge lower if the central bank’s meeting minutes reveal overly dovish policymakers, suggesting the bank may need to lower rates because of ongoing political uncertainty. 

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 1.26.

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 5 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

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 51.6878. This is not an overbought or oversold reading. The last signal was a sell 9 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 62.10. 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 10 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 -19. This is not a topping or bottoming area. The last signal was a sell 10 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 down -0.000 at 1.288. Volume was 15% below average (neutral) and Bollinger Bands were 46% wider than normal.

Open     High      Low     Close     Volume___
1.288 1.292 1.286 1.288 98,646
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1.29 1.25 1.27
Volatility: 6 12 10
Volume: 107,164 114,808 138,084

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 1.4% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into GBP= (mildly bullish). Our trend forecasting oscillators are currently bullish on GBP= and have had this outlook for the last 16 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.

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