USD/GBP (GBP=X) Maintaining Negative Outlook

USD/GBP (GBP=X) Maintaining Negative Outlook

USD/GBP (GBP=X) Maintaining Negative Outlook

Yet another quarter has passed and there is still no clarity on Brexit terms between Britain and the EU.

In the meantime, the latest about face by the BoE at its May meeting dealt a heavy blow to GBP bulls. As mentioned above, while we maintain the view of a delayed rate hike in August by the BoE, that is contingent on growth bouncing back and Brexit negotiations staying positive. Furthermore, faced with various uncertainties, GBP is unlikely to benefit much from this sole rate hike.

Maintaining a negative outlook for GBP/USD and see the pair drifting lower towards 1.30. Overall, they forecast GBP/USD at 1.33 in 3Q18, 1.32 in 4Q18, 1.31 in 1Q19 and 1.30 in 2Q19. Prevailing spot reference is 1.32.

Overall, the bias in prices is: Downwards.

The projected upper bound is: 1.34.

The projected lower bound is: 1.31.

The projected closing price is: 1.32.

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 21 white candles and 28 black candles for a net of 7 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 not 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 the case with FOREX GBP=) then this suggests that the downtrend should continue.

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 17.4436. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 6 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 32.27. 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 buy 11 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 -132.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 12 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 11 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed down -0.004 at 1.324. Volume was 34% below average (neutral) and Bollinger Bands were 52% narrower than normal.

Open High Low Close Volume___
1.326 1.329 1.322 1.324 110,590

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

Moving Averages: 10-period 50-period 200-period
Close: 1.34 1.36 1.36
Volatility: 7 7 9
Volume: 164,440 160,003 147,797

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 2.6% below its 200-period moving average and is in an upward trend. Volatility is 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 5 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.

You must be logged in to post comments :  
CONNECT WITH