British Pound: USD/GBP (GBP=X) Rebounds despite Mixed US Data
For most of last week, investors found the Pound appealing and the US Dollar relatively unappealing.
The Pound’s appeal was bolstered largely by Brexit speculation, as hopes rose that UK Parliament would be able to prevent a no-deal Brexit, while Prime Minister Theresa May and opposition Leader Jeremy Corbyn held talks over a potential Brexit compromise.
Investors are hoping that these high level talks could lead the Brexit process in a softer direction, and if a softer Brexit passed through Parliament it would be a Pound-positive outcome.
This made it easier for Sterling to climb versus the US Dollar earlier in the week, when disappointing US retail sales data and non-manufacturing PMIs limited US Dollar demand.
On top of this, higher hopes for progress in US-China trade negotiations made investors hesitant to keep buying safe haven currencies like the US Dollar.
Towards the end of the week though, the Pound shed much of its weekly gains versus the US Dollar as investors became anxious about if, or for how long, the Brexit process could be delayed.
Prime Minister May has once again requested for Brexit to be delayed to the 30th of June.
However, this request has been delayed in the past and as a result the Pound’s appeal was limited, despite EU Council President Donald Tusk indicating the EU could give Brexit a long and more flexible extension.
The Pound to US Dollar’s late-week losses were exacerbated on Friday afternoon, as the latest US Non-Farm Payroll report saw more new US jobs than expected in March.
GBP USD Exchange Rate Forecast: Brexit Delay News to Dominate Movement
While markets have largely priced in another delay for the Brexit process, it is not yet set in stone. Until a Brexit delay is confirmed and the details are in, the Pound will remain volatile as the possibility of a no-deal Brexit at the end of this week persists.
The UK and EU will be holding key meetings over the coming week to decide on how to delay the Brexit process further.
The UK government is hesitant to delay Brexit for a long period of time, as it would mean taking part in European elections.
As a result, some officials are still hoping that a Brexit deal of some kind can be passed through Parliament by the end of the week.
If it does, a soft Brexit would be confirmed and the Pound could see a surge in demand.
Notable UK data will be published next week too, including growth data from February. However, amid the Brexit chaos and uncertainty this will likely take a backseat to upcoming Brexit news.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1.33.
The projected lower bound is: 1.28.
The projected closing price is: 1.30.
A black body occurred (because prices closed lower 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 19 white candles and 29 black candles for a net of 10 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 50.0000. This is not an overbought or oversold reading. The last signal was a buy 19 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 44.10. 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 26 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 -108.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 3 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 down -0.004 at 1.304. Volume was 6% above average (neutral) and Bollinger Bands were 15% narrower than normal.
Open High Low Close Volume___
1.308 1.312 1.298 1.304 188,699
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1.31 1.31 1.30
Volatility: 8 11 11
Volume: 184,206 176,552 180,127
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 0.5% above 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 3 periods.