USD/GBP (GBP=X) stays under pressure below 1.33 as greenback preserves its strength
- GBP/USD erases more than 150 pips from its daily highs.
- US Dollar Index approaches the critical 95 mark.
- UK government official expects a desired Brexit outcome.
The USD’s strength remains as the main theme of the FX space on Thursday. The GBP/USD pair, which touched a daily high of 1.3445 earlier in the day, broke below the 1.33 mark in the NA session to refresh its lowest level since June 1 at 1.3270. As of writing, the pair was trading at 1.3280, down 0.7% on the day.
Yesterday’s hawkish FOMC statement and Chairman Powell’s upbeat speech failed to wale up the USD bulls as investors refrained from taking large positions ahead of today’s European Central Bank meeting. With the ECB failing to satisfy the markets with its tapering announcement and Draghi doing his best to avoid delivering clear remarks regarding the timing of a rate hike, investors assessed the USD as the currency with a higher potential of gaining value.
“The announcement that the ECB expects interest rates “to remain at their present levels at least through the summer of 2019 and in any case for as long as necessary to ensure that inflation is back at target” is a signal that sequencing is clearly longer than the six months markets had been anticipating for a long while. A rate hike before September 2019 looks highly unlikely,” ING analysts commented on the ECB’s statement.
Technical levels to consider
The initial support for the pair aligns at 1.3200 (psychological level/May 29 low/Nov. 19, 2017, low) ahead of 1.3120 (Nov. 12, 2017, low) and 1.3040 (Nov. 3, 2017, low). On the upside, resistances could be encountered at 1.3350 (20-DMA), 1.3440 (Jun. 6 high) and 1.3500 (psychological level).
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.
A white body occurred (because prices closed higher 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 22 white candles and 27 black candles for a net of 5 black candles.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 14.6251. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 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 31.92. 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 10 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 -120.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 11 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 10 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed unchanged at 1.326. Volume was 96% below average (consolidating) and Bollinger Bands were 53% narrower than normal.
Open High Low Close Volume___
1.326 1.327 1.326 1.326 6,430
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: 150,020 157,125 146,906
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.
FOREX GBP= is currently 2.5% 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 4 periods.
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