British Pound: USD/GBP (GBP=X) to struggle against the US Dollar until there is Brexit clarity

British Pound: USD/GBP (GBP=X) to struggle against the US Dollar until there is Brexit clarity

British Pound: USD/GBP (GBP=X) to struggle against the US Dollar until there is Brexit clarity

One positive is that at least the extension removes the threat of a no-deal scenario for the time being but until there is some longer-term clarity, I fear the Pound could struggle to make any significant impact against the greenback.

Whilst the Pound is likely to find support just above 1.30, this key threshold for the GBP/USD rate is once again likely to be tested based on the downward trend of recent days.

The US Dollar remains well supported despite concerns over the potential fallout for the US economy, in relation to the on-going trade standoff with China.

Are US recession predictions off the mark?

Many of the early year forecasts had indicated that the US economy could be set for a recession during the second half of 2019, a bold claim considering how well the US economy has performed in recent times.

Whilst their accelerated growth has slowed, the majority of the economic data being released from the US indicates a robust economy, supported no doubt by low unemployment figures and strong Gross Domestic Product (GDP) data.

Whilst President Donald Trump is never far from controversy, he has managed to refrain from any political implosions of late. Many of his economic decisions seem to be helping to support the US Dollar around the current levels against the Pound.

How GBP/USD rates evolve from here will likely be linked to any progress in Brexit talks but with the current outlook dovish at best, the Pound could be set for a further period of stagnation against the well supported US Dollar.

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 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 27 black candles for a net of 6 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 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 9.9428. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 28 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 40.91. 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 35 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 -186.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. 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 sell 20 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed down -0.005 at 1.299. Volume was 4% below average (neutral) and Bollinger Bands were 36% narrower than normal.

Open High Low Close Volume___
1.304 1.305 1.298 1.299 164,389

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

Moving Averages: 10-period 50-period 200-period
Close: 1.31 1.31 1.30
Volatility: 5 11 11
Volume: 160,539 174,225 179,513

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 0.2% above 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 12 periods.

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