British Pound: USD/GBP (GBP=X) sinks on Bank of England division

British Pound: USD/GBP (GBP=X) sinks on Bank of England division

British Pound: USD/GBP (GBP=X) sinks on Bank of England division

The pound US dollar exchange rate eased this afternoon after the Bank of England (BoE) left its interest rate unchanged at 0.75 percent. This came despite two dissenting policymakers voting to cut the rate to 0.5 percent. The BoE was gloomy in its forecasts for the British economy, saying in its latest Monetary Policy Report: “Growth in the UK economy has been volatile this year in part because of Brexit preparations.”

British politics continued to dominate headlines today, as the major parties outlined their spending plans ahead of the December 12 general election. 

With the latest YouGov poll placing the Tories ahead of Labour by 15 points, any indication that the lead has been sustained would benefit the pound. 

Markets increasingly perceive a Conservative government as the best way to break the parliamentary Brexit deadlock and infuse the current unstable political outlook with some clarity.

After officials at the Federal Reserve signalled a pause in their easing cycle last week, an improvement in the US employment sector boosted the case for a more hawkish Fed in its next policy statement. 

We could see the US dollar improve further against the pound at the top of the week if Friday’s preliminary Michigan Consumer Sentiment Index for November meets consensus and improves. 

Meanwhile, with no notable UK economic data due until next week, the pound will continue to be driven by political developments ahead of next month’s general election. 

If the Conservatives maintain their lead in polls, confidence in the pound is likely to strengthen.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 1.31.

The projected lower bound is: 1.26.

The projected closing price is: 1.28.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 4 black candles for a net of 1 white candles. During the past 50 bars, there have been 26 white candles and 23 black candles for a net of 3 white 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 11.7774. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 12 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 56.22. 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 13 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 -122.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 13 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 8 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed up 0.001 at 1.282. Volume was 100% below average (consolidating) and Bollinger Bands were 41% narrower than normal.

Open     High      Low     Close     Volume___
1.281 1.282 1.281 1.282 110
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1.29 1.26 1.27
Volatility: 5 12 10
Volume: 93,890 111,687 136,532

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 0.9% above its 200-period moving average and is in an upward 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 bullish on GBP= and have had this outlook for the last 19 periods.

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