Expect USD Go Higher During July Then Buy British Pound: USD/GBP (GBP=X)
This is a market that contains a lot of moving pieces that people are paying attention to.
The British pound fell at the start during the trading session on Wednesday, as we’ve seen a small amount of a “risk off” move early in the day however was turned around as we are on the brink of a significant support level.
This is a market that contains a ton of moving pieces that people are paying attention to, not the least of which is the undeniable fact that it looks like we are about to have a “hard Brexit” in the future, or at least have much more chance of that happening.
When you examine the candlestick, we are sitting between the 50 day EMA on the bottom, and also the 200 day EMA just above. These moving averages are starting to squeeze together even more, and so it looks as if the market is eventually aiming to pop in one direction or the other. The hammer for the trading session is somewhat supportive or optimistic, just as the shooting star from the previous session is somewhat resistive. Because of this, it’s like we are going to go back and forth, and I think we are going to continue to hang around the 200 day EMA in general, which suggests that the 1.2550 level could be a bit of a magnet for price.
If we do break above the 200 day EMA it’s possible that we may go looking towards 1.2750 level, an area that cause quite a bit of resistance previously.
On the other hand, if we break down below the 50 day EMA then I feel it opens up a move down to the 1.2250 level given enough time. I do think that it’s possible that we may see some selling pressure but quite honestly this is a market that is all over the place and as a result I would be a bit cautious regarding putting a lot of cash to work. After all, the British pound has rallied, despite the fact that nothing economic could be driving this pair higher other than the Federal Reserve trying to kill the dollar.
That being said, the Bank of England advised recently that negative interest rates were not out of the question, so that in theory would kill the Sterling, but it will be interesting to see when the market shifts what happens next. Ultimately, I feel we are about to see more chop going back and forth and therefore it’s going to be troublesome sailing.
Sterling/US Dollar Exchange Rate
Today’s Forex Rates
GBP/US Dollar FX Polls
Economic Events
Technical Indicators
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 1.25.
The projected upper bound is: 1.27.
The projected lower bound is: 1.23.
The projected closing price is: 1.25.
Candlesticks
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 26 white candles and 23 black candles for a net of 3 white 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 31.6609. This is not an overbought or oversold reading. The last signal was a sell 5 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 51.19. 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 -78. This is not a topping or bottoming area. The last signal was a sell 5 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 2 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed down -0.004 at 1.251. Volume was 32% below average (neutral) and Bollinger Bands were 12% narrower than normal.
Open High Low Close Volume 1.255 1.257 1.247 1.251 88,366
Technical Outlook Short Term: Neutral Intermediate Term: Bullish Long Term: Bearish
Moving Averages: 10-period 50-period 200-period Close: 1.26 1.24 1.27 Volatility: 9 11 14 Volume: 146,086 127,629 115,764
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 1.4% below 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 12 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.
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