British Pound: USD/GBP (GBP=X) Struggles Ahead of Brexit Vote
The Pound (GBP) was left on the defensive at the end of last week, falling against the majority of its peers amidst concerns about the progress on Brexit talks between the UK and EU.
This comes ahead of a vote on Theresa May’s Brexit deal on Tuesday, with the PM’s failure to secure a new agreement on the Irish backstop seen as scuppering any chance of the deal making it through the House of Commons.
The vote itself is likely to prompt some significant volatility in the Pound this week as it is highly likely to overshadow any other developments such as the publication of Chancellor Philip Hammond’s Spring Budget.
GBP/EUR Exchange Rate Retreats from Best Levels
The Pound Euro (GBP/EUR) exchange rate tumbled around half a cent on Friday, falling back from the pairing best levels in spite of some worrying factory order figures from Germany.
This rally in the single currency was likely driven by both a drop in the US Dollar (USD) as well as investors seeking to pick up a bargain after EUR exchange rates plummeted in the wake of the European Central Bank’s (ECB) rate decision on Thursday.
Meanwhile, the Euro may struggle today following the release of Germany’s latest industrial production figures at the start of the session as factory output was shown to have contracted sharply in January.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 1.30.
The projected upper bound is: 1.32.
The projected lower bound is: 1.28.
The projected closing price is: 1.30.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 2 white candles and 7 black candles for a net of 5 black candles. During the past 50 bars, there have been 22 white candles and 26 black candles for a net of 4 black candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 9.2715. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 6 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 43.47. 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 7 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 -123.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 6 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 2 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed down -0.004 at 1.297. Volume was 61% below average (consolidating) and Bollinger Bands were 29% wider than normal.
Open High Low Close Volume___
1.302 1.302 1.295 1.297 71,464
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.32 1.30 1.30
Volatility: 10 10 10
Volume: 170,092 165,234 178,078
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 0.1% below 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 0 periods.