USD/GBP (GBP=X) consolidates daily losses below 1.32

USD/GBP (GBP=X) consolidates daily losses below 1.32

USD/GBP (GBP=X) consolidates daily losses below 1.32

  • GBP/USD looks to end the day below 1.32 for the first time this year.
  • US Dollar Index fails to break above 95.
  • Risk appetite remains weak on Tuesday.

The GBP/USD pair slumped to its worst level since November of 2017 at 1.3150 in the early NA session and went into a consolidation phase. As of writing, the pair was trading at 1.3165, losing 0.6%, or 80 pips, on the day.

The USD valuation remains as the main driver of the pair’s price action in the FX markets on Tuesday. After retracing a portion of last week’s gains on Monday, the US Dollar Index gathered momentum on Tuesday as the lack of fundamental catalysts allowed investors to stay focused on Fed’s monetary policy outlook. However, with the demand for the US T-bonds rising amid the risk-off environment, the yield on the 10-year reference lost nearly 2% and made it difficult for the greenback to preserve its strength. At the moment, the DXY is up 0.35% on the day at 94.75.

Today’s data from the U.S. showed that the housing starts increased by 5% in May while building permits contracted by 4.6%.

Overall, the bias in prices is: Downwards.

The projected upper bound is: 1.33.

The projected lower bound is: 1.30.

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 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 19 white candles and 30 black candles for a net of 11 black candles.

An inverted hammer occurred. If this occurs during a downtrend (which appears to be the case with FOREX GBP=) it implies a reversal. Look for a confirmation of the reversal on the bar.

A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).

A shooting star occurred (a shooting star has a small real body near the bottom of the candle and a long upper shadow). During an uptrend the long upper shadow indicates that the bears are gaining control and a top may occur.

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 9.8440. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 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 27.71. 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 13 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 -164.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 14 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 1 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed down -0.001 at 1.317. Volume was 95% below average (consolidating) and Bollinger Bands were 39% narrower than normal.

Open High Low Close Volume___
1.317 1.319 1.317 1.317 8,170

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

Moving Averages: 10-period 50-period 200-period
Close: 1.33 1.36 1.36
Volatility: 6 7 9
Volume: 148,710 157,268 147,527

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 3.2% 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 7 periods. Our momentum oscillator is currently indicating that GBP= is currently in an oversold condition.

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