British Pound: USD/GBP (GBP=X) Slams Into Large Figure

British Pound: USD/GBP (GBP=X) Slams Into Large Figure

British Pound: USD/GBP (GBP=X) Slams Into Large Figure

The British pound has rallied a bit during the trading session on Friday, reaching above the 1.30 level but is starting to see a bit of noise. The 50 day EMA sits just above there as well and could cause some issues. Ultimately, the market is a bit overbought so a little bit of a pullback heading into the weekend of course would make some sense. Ultimately though, if the market does turn around a break above the high of the Friday session, then it opens up the door towards the 1.31 handle, and then by extension the 1.32 level.

Keep in mind that the US dollar is in a lot of trouble against certain currencies, and the British pound certainly has shown a lot of resiliency over the last couple of days. But at this point it is probably more about the US dollar and the fact that the Federal Reserve is expected to cut interest rates by another 50 basis points that is driving this pair. Granted, there’s a lot of noise when it comes to the British pound and although I do suspect that the market is going to find pullbacks as value as the US dollar certainly has taken a serious hit as far as viability is concerned. Furthermore, the market participants continue to see volatility, and as a result it is likely that the pair continues to make a lot of noise. Obviously, weekend headlines could come into play, but right now the dollar is very soft.

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: 1.33.

The projected lower bound is: 1.29.

The projected closing price is: 1.31.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 black candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 95.4546. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 4 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 58.05. 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 59 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 162.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 3 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 buy 1 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed up 0.003 at 1.308. Volume was 99% below average (consolidating) and Bollinger Bands were 2% wider than normal.

Open     High      Low     Close     Volume___
1.304 1.310 1.303 1.308 537
Technical Outlook 
Short Term: Overbought
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: 111,669 104,439 110,804

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 2.9% above its 200-period moving average and is in an downward trend. Volatility is relatively normal 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 41 periods.

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