British Pound: USD/GBP (GBP=X) steady as UK retail sales beat expectations

British Pound: USD/GBP (GBP=X) steady as UK retail sales beat expectations

British Pound: USD/GBP (GBP=X) steady as UK retail sales beat expectations

The GBP/USD exchange rate is currently trading at $1.206, virtually unchanged from today’s opening levels. UK retail sales figures have helped the Pound find its feet this morning. The Office for National Statistics (ONS) reported a 0.2 percent expansion in sales for July, slowing from sales growth of 0.9 percent the previous month, but confuting expectations for a sales slump.

Despite rising Brexit uncertainty, consumer confidence and spending remained optimistic last month, particularly online with promotions like Amazon’s Prime Day contributing to a 6.9 percent sales surge. Brick and mortar stores also enjoyed increased consumer attention in July, with a month-on-month growth of 1.6 percent in department store sales – the first upswing this year. GBP investors cheered the surprise result, hoping robust consumer spending might serve to prop-up the UK economy as it did at the start of 2019. 

Looking ahead, this afternoon will see the US release retail sales figures which could exert some pressure on the GBP/USD exchange rate.

Economists forecast expanded sales growth for a fifth consecutive month in July, which could strengthen the US dollar at the start of the US trading session.

The latest US industrial production figures will follow, potentially lending further support to USD exchange rates if factory output expanded again last month after stagnation in June.

With no more conspicuous UK data for the week, GBP investors will probably turn their focus back to political developments.

Brexit uncertainty on Friday will continue to drive Sterling, potentially limiting any upside in GBP exchange rates if the Irish backstop stalemate continues.

Technical Indicators

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 1.24.

The projected upper bound is: 1.23.

The projected lower bound is: 1.19.

The projected closing price is: 1.21.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 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 38.6831. This is not an overbought or oversold reading. The last signal was a buy 8 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 35.26. This is not a topping or bottoming area. However, the RSI just crossed above 30 from a bottoming formation. This is a bullish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 0 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 -46. This is not a topping or bottoming area. The last signal was a buy 8 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 0 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed up 0.005 at 1.211. Volume was 17% below average (neutral) and Bollinger Bands were 71% wider than normal.

Open     High      Low     Close     Volume___
1.206 1.215 1.205 1.211 109,084
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.21 1.25 1.28
Volatility: 6 8 10
Volume: 118,739 119,727 159,026

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 5.4% below 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 27 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.

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