British Pound: USD/GBP (GBP=X) Stagnates Over Brexit Woes
The pound has been hit by uncertainty in the domestic political circles in the UK as resignations from trusted ministers seek to undermine the power of the UK PM May.
The British pound was frail on Tuesday after the departure of two key euro skeptic ministers raised worries about a “hard Brexit” while the dollar stood near three-week lows against its rivals after data showed soft U.S. wage growth. The pair stood at 1.3233 having fallen as low as 1.3189 on Monday, after Prime Minister Theresa May’s foreign minister and Brexit negotiator quit in protest at her plans to keep close trade ties with the European Union.
The pair regained some ground after several Conservative lawmakers said May is likely safe from a leadership challenge despite the resignation of Boris Johnson and Brexit minister David Davis. Their departures shatter May’s own proclamation of cabinet unity last Friday, when she said she believed she had, after two years of wrangling, secured agreement on Britain’s biggest foreign and trading policy shift in almost half a century.
While the expectations that the Bank of England might hike interest rates in the summer underpin the sterling, political uncertainties in UK are weighing on the currency. The dollar was not helped by Friday’s data showing U.S. wage growth remained tame despite tight labor market but the greenback some increase in Bid activity during late American market hours against major global currencies. The GBP/USD is trading down near 1.3240/30 price range ahead of Tuesday’s London market session. With Brexit concerns continuing to put a drag on the GBP’s chart action, Tuesday sees a raft of economic data, all dropping at 08:30 GMT.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 1.34.
The projected lower bound is: 1.31.
The projected closing price is: 1.32.
A black body occurred (because prices closed lower 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 23 white candles and 26 black candles for a net of 3 black candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with FOREX GBP=). It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 51.3777. This is not an overbought or oversold reading. The last signal was a sell 2 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 48.10. 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 8 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 66. This is not a topping or bottoming area. The last signal was a buy 8 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 6 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed down -0.002 at 1.326. Volume was 92% below average (consolidating) and Bollinger Bands were 50% narrower than normal.
Open High Low Close Volume___
1.328 1.328 1.325 1.326 12,724
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.32 1.33 1.36
Volatility: 8 7 9
Volume: 157,221 162,575 151,129
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 2.4% below its 200-period moving average and is in an upward 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 bullish on GBP= and have had this outlook for the last 1 periods.
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