British Pound: USD/GBP (GBP=X) remains in a short-term uptrend
The Pound-to-US Dollar exchange rate crossed the 1.30 Rubicon last week when it rose from an open price of 1.2927 to a close, on Friday, of 1.3066 after Brexit risks subsided on the back of hopes of a deal being brokered.
From a technical standpoint there are really two interpretations that can be drawn from the GBP/USD chart as it stands: one is straight-forwardly bullish and the other is bearish.
The bullish interpretation is based on the fact the pair is now probably in a short-term uptrend which is biased to go higher based on the principle that the trend is more likely to extend than reverse.
Although the pair has reached a key trendline drawn from the June highs and has failed to break through it – withdrawing instead to just below it – the exchange rate is still more likely to eventually pierce through it than reverse.
A re-break above the 1.3134 highs would provide the necessary confirmation for such a move, with the next target at 1.3190, at the level of the R1 monthly pivot, a level – as its names suggests – where traders expect the price to rotate and pull-back and which thus attracts a lot of technical traders fading the trend.
Nevertheless, if there is a move up to 1.3190 we would expect it to probably extend even higher on the back of the bullish euphoria following the trendline break, and a further move above 1.3210 would, we would estimate, probably confirm such an extension to the next target at 1.3350, at the same level as the July highs.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1.32.
The projected lower bound is: 1.29.
The projected closing price is: 1.31.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 23 white candles and 26 black candles for a net of 3 black candles.
An inverted hammer occurred. If this occurs during a downtrend it implies a reversal. Look for a confirmation of the reversal on the bar.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
A shooting star occurred (a shooting star has a small real body near the bottom of the candle and a long upper shadow). During an uptrend(which appears to be the case with FOREX GBP=) the long upper shadow indicates that the bears are gaining control and a top may occur.
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 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 74.6913. This is not an overbought or oversold reading. The last signal was a sell 0 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 59.11. 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 20 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 97. This is not a topping or bottoming area. The last signal was a sell 0 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 buy 19 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed up 0.000 at 1.307. Volume was 100% below average (consolidating) and Bollinger Bands were 13% narrower than normal.
Open High Low Close Volume___
1.307 1.308 1.307 1.307 175
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.30 1.30 1.35
Volatility: 6 8 9
Volume: 146,666 166,701 160,901
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 3.3% below 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 11 periods.
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