British Pound: USD/GBP (GBP=X) trading at the back of major economic developments and geopolitical tussles

British Pound: USD/GBP (GBP=X) trading at the back of major economic developments and geopolitical tussles

British Pound: USD/GBP (GBP=X) trading at the back of major economic developments and geopolitical tussles

From a fundamental perspective, the GBP/USD currency pair is trading at the back of major economic developments and geopolitical tussles. The Pound Sterling’s upside potential appears to be limited by Brexit woes as the reality of a  hard Brexit deal begins to sink in. 

On the other hand, in the US, Trump has made it clear that the world’s two largest economies could be on the verge of a massive trade war, which threatens to escalate to more than just the two nations.

And on Monday, the US 6-month and the 3-month bill auction rates fell to 1.950% and 1.99% respectively from 2.035% and 2.07% thereby adding pressure to the greenback. However, with the Markit PMI  services and Composite beating expectations, the greenback found some support to lean on and hold back the Pound Sterling’s rebound.

Technical Analysis

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 1.25.

The projected upper bound is: 1.23.

The projected lower bound is: 1.20.

The projected closing price is: 1.21.

Candlesticks

A white body occurred (because prices closed higher 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 22 white candles and 28 black candles for a net of 6 black candles.

Separating lines occurred. If the lines occur during an uptrend and the first line is black and the second is white (which is the case with FOREX GBP=) then this suggests that the uptrend should continue.

If the separating lines occur during a downtrend (which appears to be the case with FOREX GBP=) and the first line is white and the second is black (which is not the case with FOREX GBP=) then this suggests that the downtrend should continue.

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 33.0274. This is not an overbought or oversold reading. The last signal was a buy 1 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 29.29. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 19 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 -76. 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 7 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed up 0.001 at 1.215. Volume was 94% below average (consolidating) and Bollinger Bands were 84% wider than normal.

Open     High      Low     Close     Volume___
1.214 1.216 1.213 1.215 7,421
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.22 1.25 1.28
Volatility: 9 8 10
Volume: 108,224 121,625 161,191

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 5.3% below 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 20 periods. Our momentum oscillator is currently indicating that GBP= is currently in an oversold condition.

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