British Pound: USD/GBP (GBP=X) upcoming week’s key events are the BoE rate announcement and inflation report

British Pound: USD/GBP (GBP=X) upcoming week’s key events are the BoE rate announcement and inflation report

British Pound: USD/GBP (GBP=X) upcoming week’s key events are the BoE rate announcement and inflation report

After a string of weekly gains, cable headed lower last week. Parliament revisited the withdrawal agreement, but the confusion over a post-Brexit remains. Lawmakers indicated that they oppose a no-deal and sent Theresa May back to Brussels to renegotiate the Irish border backstop. However, the EU insists that they will not reopen the withdrawal deal, so what happens next remains unclear.

British manufacturing PMI slipped to 52.8, its weakest level in three months. The turmoil surrounding Brexit and global trade war have weighed on the manufacturing sector as well as exports. Consumer credit also slowed, as the gain of  6.6 percent in December year-on-year marked the weakest pace since December 2014. Back in 21017, consumer credit was growing at a 10 percent clip.

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 1.29.

The projected upper bound is: 1.33.

The projected lower bound is: 1.29.

The projected closing price is: 1.31.

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 25 white candles and 25 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 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 24.5436. 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 59.15. 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 sell 5 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 33. This is not a topping or bottoming area. The last signal was a sell 4 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 33 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed down -0.001 at 1.307. Volume was 99% below average (consolidating) and Bollinger Bands were 35% wider than normal.

Open High Low Close Volume___
1.308 1.308 1.307 1.307 1,329

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 1.31 1.28 1.30
Volatility: 10 10 10
Volume: 159,485 178,325 176,355

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 0.3% above its 200-period moving average and is in an upward 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 bullish on GBP= and have had this outlook for the last 24 periods.

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