British Pound: USD/GBP (GBP=X) UK inflation figures for July beat forecasts

British Pound: USD/GBP (GBP=X) UK inflation figures for July beat forecasts

British Pound: USD/GBP (GBP=X) UK inflation figures for July beat forecasts

The pound US dollar exchange rate is holding steady, with the pairing fluctuating around $1.205. UK inflation figures for July beat forecasts, rising from 2.0 percent to 2.1 percent – overshooting the Bank of England’s (BoE) 2 percent target.

However, the year-on-year Retail Prices Index – another important inflation gauge – dropped from 2.9 percent to 2.8 percent. Overall, today’s data supported sentiment and diminished expectations that the BoE will make changes to interest rates in its scheduled September 19 meeting. James Smith, a Developed Markets Economist at ING, commented: “We suspect the Bank of England will continue to focus on the strong wage growth backdrop. Unlike in other global economies, a UK rate cut seems unlikely in the near-term.”

Brexit remains in focus today after former Chancellor of the Exchequer Philip Hammond warned Prime Minister Boris Johnson, leaving without a deal on October 31 would be a betrayal of the referendum result. 

Mr Hammond said: “Most people in this country want to see us leave in a smooth and orderly fashion that will not disrupt lives, cost jobs or diminish living standards, whether they voted leave or remain in 2016. 

Looking ahead, Brexit developments will continue to dictate movement in the pound to US dollar exchange rate, with any further signs of a break-down in UK-EU negotiations likely to see Sterling fall against its peers.

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 1.24.

The projected upper bound is: 1.22.

The projected lower bound is: 1.19.

The projected closing price is: 1.20.

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 20 white candles and 30 black candles for a net of 10 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 28.1892. This is not an overbought or oversold reading. The last signal was a buy 8 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 28.70. 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 7 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 -102.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 buy 0 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed unchanged at 1.206. Volume was 99% below average (consolidating) and Bollinger Bands were 73% wider than normal.

Open     High      Low     Close     Volume___
1.206 1.206 1.205 1.206 1,644
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.21 1.24 1.28
Volatility: 6 8 10
Volume: 107,995 117,578 158,489

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 5.8% below 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 27 periods. Our momentum oscillator is currently indicating that GBP= is currently in an oversold condition.

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