British Pound: USD/GBP (GBP=X) Target towards 1.30 level

British Pound: USD/GBP (GBP=X) Target towards 1.30 level

British Pound: USD/GBP (GBP=X) Target towards 1.30 level

The British pound has rallied slightly during the trading session on Friday, showing signs of support yet again at the 1.29 level. I think at this point, the market is likely to go looking towards 1.30 level but will probably find a bit of resistance just above there in the form of the 50 day EMA. Breaking above the 50 day EMA then allows the market to look towards the 1.32 handle. Ultimately, this is a market that continues to chop around as one would expect with the British economy still at the mercy of negotiations with the EU.

Having said all of that, the British economy has been much more resilient than most people had anticipated, and therefore I think that the British pound will be thought of as undervalued by a lot of longer-term traders. This doesn’t mean that you jump in with both feet, rather that the market rallying from here isn’t a huge surprise at this point in time.

To the downside, the market should have plenty of support at multiple levels, not the least of which of course is going to be the 200 day EMA. However, the 1.29 level is supportive, just as the 1.28 level is. Looking at the chart, it’s likely that the markets will find plenty of value hunters underneath. I have no interest in shorting the British pound, but I recognize that the market is going to be difficult to hang on to unless of course something changes with the attitude of the negotiations. On the other side of the equation is the US dollar, so that does make this a bit sluggish to the upside.

Technical Indicators

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 1.30.

The projected upper bound is: 1.31.

The projected lower bound is: 1.27.

The projected closing price is: 1.29.

Candlesticks

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 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 41.1483. This is not an overbought or oversold reading. 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 46.00. 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 49 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 -20. This is not a topping or bottoming area. The last signal was a buy 1 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 sell 2 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed down -0.002 at 1.295. Volume was 94% below average (consolidating) and Bollinger Bands were 30% narrower than normal.

Open     High      Low     Close     Volume___
1.296 1.297 1.294 1.295 5,788
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1.30 1.30 1.27
Volatility: 8 10 9
Volume: 94,884 98,627 111,938

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 2.0% 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 31 periods.

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