British Pound: USD/GBP (GBP=X) Rallies After Election Results

British Pound: USD/GBP (GBP=X) Rallies After Election Results

British Pound: USD/GBP (GBP=X) Rallies After Election Results

The British pound has spiked all the way to the 1.35 handle but has since pulled back quite significantly. That being said, there should be plenty of buyers underneath and a lot of people who have missed out on the initial move will be looking to get involved. The hammer that formed during the previous session of course is a very strong looking and I think it shows that there is a lot of support all the way down to the 1.30 level underneath. That is the top of the bullish flag, and it should cause a lot of support due to the fact that there is so much in the way of order flow there. I do believe that this pullback should end up being a nice buying opportunity.

Technical Indicators

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 1.29.

The projected upper bound is: 1.36.

The projected lower bound is: 1.32.

The projected closing price is: 1.34.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 29 white candles and 19 black candles for a net of 10 white 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.

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 61.4968. This is not an overbought or oversold reading. The last signal was a sell 2 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 77.62. This is where it usually tops. 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 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 137.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 3 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 buy 8 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed up 0.002 at 1.334. Volume was 97% below average (consolidating) and Bollinger Bands were 29% wider than normal.

Open     High      Low     Close     Volume___
1.333 1.334 1.333 1.334 3,415
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1.32 1.29 1.27
Volatility: 8 10 9
Volume: 91,620 103,545 127,365

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 5.1% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of GBP= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on GBP= and have had this outlook for the last 5 periods. Our momentum oscillator is currently indicating that GBP= is currently in an overbought condition.

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