British Pound: USD/GBP (GBP=X) takes cues from jobs data; USD retail sales

British Pound: USD/GBP (GBP=X) takes cues from jobs data; USD retail sales

British Pound: USD/GBP (GBP=X) takes cues from jobs data; USD retail sales

The Pound-to-Dollar rate is set to begin trading around 1.3000 on Sunday after closing more than one percent lower last week, although studies of the charts suggest the outlook for the exchange rate has turned neutral of late. 

Sterling still ceded ground to the Dollar last week despite the U.S. currency also having declined broadly during recent sessions, with the Dollar index down for the week while the Euro-to-Dollar rate closed higher. 

An absence of progress in the cross-party Brexit talks was behind the Pound’s decline, with weakness egged on by reports that Nigel Farage’s Brexit Party is leading in the opinion polls ahead of the EU elections set for May 23rd. This may make it less likely that Theresa May compromises in the Brexit talks.  

From a technical perspective, the previously strong short-term uptrend has now reversed and the outlook for the exchange rate is neutral, pending further developments. 

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1.32.

The projected lower bound is: 1.28.

The projected closing price is: 1.30.

Candlesticks

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 19 white candles and 30 black candles for a net of 11 black candles.

A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).

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 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 16.6946. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 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 46.29. 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 51 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 8. This is not a topping or bottoming area. The last signal was a sell 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 7 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed down -0.001 at 1.300. Volume was 13% below average (neutral) and Bollinger Bands were 29% narrower than normal.

Open High Low Close Volume___
1.301 1.305 1.299 1.300 146,415

Technical Outlook
Short Term: Oversold
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 1.30 1.31 1.30
Volatility: 9 10 10
Volume: 137,584 167,971 177,598

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 0.3% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 3 periods.

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