British Pound: USD/GBP (GBP=X) to move sideways or decline in short-term
The Pound-to-Dollar rate is trading at around 1.2589 at the start of the new week, after falling 1.13% in the previous week. Studies of the charts suggest that the exchange rate is likely to continue falling over the next five days but we are wary of a bounce in Sterling on domestic politics and the midweek U.S. Federal Reserve meeting.
Looking at the technicals in more detail, the 4-hour chart shows the pair has declined steeply, almost all the way down to the May lows at 1.2559. It will probably continue down to those lows but afterwards will probably bounce.
The RSI momentum indicator is now in the oversold zone under 30 and this indicates an increased likelihood of a bounce or period of sideways market activity.
We see the pair probably oscillating between the May lows and the June 10 highs at 1.2653 over the short-term, defined as a period of about a week, and for which we use the 4 hr time frame charts.
Given the overarching trend is bearish, however, we expect the pair to eventually break lower.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 1.27.
The projected lower bound is: 1.25.
The projected closing price is: 1.26.
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 17 white candles and 33 black candles for a net of 16 black candles.
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.
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 11.0877. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 16 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 34.15. 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 11 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 -126.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 5 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 9 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed up 0.000 at 1.259. Volume was 95% below average (consolidating) and Bollinger Bands were 59% narrower than normal.
Open High Low Close Volume___
1.260 1.260 1.257 1.259 7,237
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.27 1.29 1.29
Volatility: 6 6 10
Volume: 125,830 142,838 172,936
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 2.7% 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 23 periods.