GBPUSD Turns Weaker on H1 Time frame

  • GBPUSD
    (${instrument.percentChange}%)

The chart on the left shows the GBPUSD daily time frame. Its heiken ashi is in the weak area, between the lower blue and lower red bands. The daily stochastic is maintaining a weak reading in its lower quintile (aqua arrow). This is indicative of bearish momentum. Given this weakness in the daily, the right chart is interesting. It is the H1 timeframe and shows that after a ~24hr rally, weakness is starting to emerge. The H1 stochastic has crossed bearish, as has GBPUSD's EMAs (aqua ellipse). If the H1 stochastic continues to 20, cable's price is likely to be under pressure.


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The spread between the British gilt and the US 10 yr (below top candle chart). treasury has been moving south-east since 13 October. The GBPUSD weakened during this time. Whilst both central banks will release important statements this month (Fed the 15th and BoE the 16th), and both are expected to be hawkish in tone, reports that the Fed may double its pace of tapering is likely to be the more aggressive of the two. We note that the spread's EMAs have crossed bearishly and that its RSI has dipped below 50 (red ellipse). If the correlation holds this suggests a further weakening in the currency pair.


Source: www.tradingview.com

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Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

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