British Pound: USD/GBP (GBP=X) rising on a mix of USD weakness and upbeat UK data
GBP/USD has probably stopped worrying about Brexit and found reasons to rise. The latest upwards driver has come from UK data. The Markit/CIPS services purchasing managers’ index (PMI) for May has risen to 51 points – not only beating expectations but also breaking the losing streak of the previous PMIs. The score above 50 represents an expansion in Britain’s largest sector – sending GBP/USD to the highest levels in a week.
The currency pair has also continued enjoying the weakness of the US dollar. Federal Reserve Chair Jerome Powell has deviated from pledging patience on interest rates by saying that the Fed will “act as appropriate” – seemingly opening the door to a rate cut.
However, Powell may be ready to slash rates in response to the potentially adverse impact of the trade wars – which undermine global growth and usually weigh on GBP/USD. Markets are currently focusing on the positive impact of a rate cut and ignoring the US-Sino spat which is persisting at full force.
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: 1.26.
The projected closing price is: 1.27.
A white body occurred (because prices closed higher 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 19 white candles and 31 black candles for a net of 12 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.
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 75.2365. This is not an overbought or oversold reading. The last signal was a buy 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 39.29. 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 4 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 29. This is not a topping or bottoming area. The last signal was a buy 4 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 2 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed up 0.001 at 1.269. Volume was 100% below average (consolidating) and Bollinger Bands were 5% wider than normal.
Open High Low Close Volume___
1.268 1.269 1.268 1.269 137
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: 5 6 10
Volume: 131,092 149,056 174,080
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 2.0% 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 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 16 periods.