British Pound: USD/GBP (GBP=X) slips after Carney warning on Brexit
After three days of gains, GBP/USD has dropped considerably on Thursday. In North American trade, GBP/USD is trading at 1.3075 down 0.62% on the day. On the release front, British new home-secured loans dropped to GBP 6.2 billion, shy of the estimate of GBP 7.7 billion. In the U.S, the highlight was unemployment claims, which dropped to 202 thousand. This was below the forecast of 215 thousand. On Friday, the focus will be on U.S. employment data, with the release of nonfarm payrolls and wage growth.
U.S. indicators continue to have a disappointing week. Retail sales and durable goods orders posted declines and the trend continued on Wednesday. ADP nonfarm payrolls plunged to 129 thousand, down from 183 thousand in the previous release. Is this a precursor of what to expect on Friday? Nonfarm payrolls are projected at 175 thousand, a soft number in comparison to recent releases. Wage growth is expected to slow to 0.2%. If these key indicators are softer than expected, the U.S. dollar could lose ground.
Despite the chaos surrounding Brexit, the pound has weathered the storm better than many analysts expected. GBP/USD declined 1.7% in March and has posted small gains in April. With parliament having rejected the government’s withdrawal deal but unable to provide an alternative, a hard Brexit remains a serious possibility. On Wednesday, BoE Governor Mark Carney said that the likelihood of a hard Brexit remained “alarmingly high” and that warned of the dangers of a no-deal scenario. At the same time, he said that London’s financial center could cope with Britain leaving the EU without a deal.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1.33.
The projected lower bound is: 1.28.
The projected closing price is: 1.31.
A black body occurred (because prices closed lower 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 19 white candles and 29 black candles for a net of 10 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 54.0124. This is not an overbought or oversold reading. The last signal was a buy 19 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 46.23. 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 26 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 -83. This is not a topping or bottoming area. The last signal was a buy 3 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 sell 11 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed down -0.000 at 1.307. Volume was 94% below average (consolidating) and Bollinger Bands were 18% narrower than normal.
Open High Low Close Volume___
1.308 1.308 1.307 1.307 10,748
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1.31 1.31 1.30
Volatility: 8 11 11
Volume: 166,411 172,993 179,237
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 0.8% above its 200-period moving average and is in an downward trend. Volatility is high 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 3 periods.