British Pound: USD/GBP (GBP=X) Showing Stability

British Pound: USD/GBP (GBP=X) Showing Stability

British Pound: USD/GBP (GBP=X) Showing Stability

The British pound has pulled back a bit during the trading session on Wednesday, before bouncing to show signs of resiliency yet again. The 200 day EMA currently sits below the 50% Fibonacci retracement level so it is very possible that we rally from here, but it won’t be an easy move to say the least. The gap lower that kicked off the week as been filled and it looks as if the British pound is trying to take it out, perhaps driving to the top of the Friday candlestick which is closer to the 1.29 handle.

The 50 day EMA is starting to tilt lower, showing signs of shorter-term momentum shifting to the downside yet again. That being said though, I think it probably serves more as a target at this point as technical traders tend to like the 200 day EMA for a trend defining signal. If we do break down below the 200 day EMA, then I believe the market goes looking towards the 1.2550 level, perhaps down to the 1.25 handle as it will be a big magnet for price and certainly an area that has been important more than once. Ultimately, I think that the market will find a bottom sooner or later, but it should be noted that the Bank of England still hasn’t cut rates and it is anticipated that central banks around the world are all going to take various measures to lift the global economy. There could be a bit of a shock in this pair but after the Federal Reserve dropped its interest rate by 50 basis points, it’s probably a relative play at this point to the upside.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 1.30.

The projected upper bound is: 1.31.

The projected lower bound is: 1.27.

The projected closing price is: 1.29.

Candlesticks

A white body occurred (because prices closed higher 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 22 white candles and 28 black candles for a net of 6 black candles.

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 31.6707. This is not an overbought or oversold reading. The last signal was a buy 1 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 44.86. 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 56 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 -78. This is not a topping or bottoming area. The last signal was a buy 0 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 9 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed up 0.006 at 1.287. Volume was 6% above average (neutral) and Bollinger Bands were 15% narrower than normal.

Open     High      Low     Close     Volume___
1.281 1.287 1.277 1.287 108,543
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1.29 1.30 1.27
Volatility: 10 10 10
Volume: 119,850 105,124 111,690

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 1.3% above 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 38 periods.

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