British Pound Outlook
The currency market has been so keen for Brexit news for so long it has been keeping the pound in a bit of rut with very limited volatility in recent weeks. GBPEUR levels have remained in a tight 2 cent band for the last month, with only 4 ½ cents movement I the last 3 months.
This is not excessive movement by any stretch and is indicative that perhaps we could be looking at some bigger movements in the future. Anyone who knows a little about the currency market knows that eventually when rates are a little more subdued, it is because markets are waiting for something to happen.
That something is the Brexit news for the pound, and also the news on the US election. November 3rd is the US election which could see a real change in sentiment on currency rates as investors react to the news.
Like it or not the US and the US dollar is a huge influence on economic sentiment globally and a key driver of financial markets. Politically too, a change or continuation in the White House could have some far reaching consequences.
For example, on Brexit, the strength of the deal the UK gets with the US is a seen as a key component for the UK’s success in the future. The is because trade with the US accounts for about 20% of economic output, so it plays a crucial role in the UK’s economy.
Biden has not been overly positive about the way Boris Johnson has conducted himself with the threats to renege on parts of the EU Withdrawal Bill. Nancy Pelosi, the House of Representative Speaker was also critical of the UK in this regard stating any trade deal would be in jeopardy.
On the other hand, Donald Trump has been rather vocal of his support for Boris and Brexit, and might if he wins actually help the pound to rise since he might be more keen to offer the UK a good deal in 2021.
Next week is also the latest UK Bank of England decision which ,might provide us with insight into how policymakers view the latest escalation of Corona cases. The same meeting by European counterparts this week at the ECB saw the Euro lose value and the pound could be under pressure if once again negative interest rates are discussed.
The currency markets have a number of interesting challenges to face in November as the market learns of key news on Brexit, the US election and survey’s the continued developments on Brexit. The next twists and turns could present all sorts of surprises and clients with any important currency transfers ahead should be very closely monitoring events and keep in touch with us for any key news.
Coronavirus has made the currency markets even more unpredictable and volatile in many respects, and we can help share with you the latest news and provide tools to help you make the best trades possible with the new Knightsbridge Live FX account.
GBP/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 1.29.
The projected upper bound is: 1.31.
The projected lower bound is: 1.27.
The projected closing price is: 1.29.
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 26 white candles and 24 black candles for a net of 2 white candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend. It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with FOREX GBP=), it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 19.2849. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 14 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 44.61. 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 53 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 -94. This is not a topping or bottoming area. The last signal was a sell 6 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 -0.005 at 1.289. Volume was 73% below average (consolidating) and Bollinger Bands were 44% narrower than normal.
Open High Low Close Volume 1.294 1.295 1.289 1.289 35,688 Technical Outlook Short Term: Oversold Intermediate Term: Bullish Long Term: Bullish Moving Averages: 10-period 50-period 200-period Close: 1.30 1.30 1.27 Volatility: 11 11 14 Volume: 140,527 138,395 129,661
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 1.5% above its 200-period moving average and is in an upward trend. Volatility is high 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 13 periods.