Momentum Scorecard: UK GDP Miss Puts GBP/USD on Track Lower
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TREND IN FOCUS: GBPUSD (D1)
- The GBPUSD has developed a more concerted bearish trend the past two days, with its momentum score at -2.14.
- Although the British Pound looked constructive yesterday, momentum has shifted negative amid a significant miss on the final 1Q’13 UK GDP report.
- Daily Slow Stochastics (5,3,3) have turned lower again, but remain in oversold territory; we are likely closer to a near-term bottom than top.
- Any rallies in the pair look to be sold; price could climb to 1.5395/405 (38.2% Fib March low to May high on a rebound now that the GBPUSD has fallen to RSI trend support off of the March 12 and May 29 lows.
- A further breakdown in GBPUSD calls for an immediate retest of channel support at 1.5100 today.
*Trend definitions: “uptrend” is defined as 8-MA>21-MA>55-MA; “downtrend” is defined as 8-MA<21-MA<55-MA; a “trendless” market occurs when continuity is absent.
*Scoring methodology: there are seven time frames, ascending from m15 (15-minutes) to W1 (one-week). In ascending order, each pair is assigned a value from -7 to +7 based on the trend apparent on the specified time frame (I.E. a m15 uptrend equals +1, whereas a H1 downtrend equals -3). If neither an uptrend nor downtrend is present, the trendless timeframe receives a score of 0. These points are totaled and the average is reported on the right. The strongest uptrend would achieve a score of +4.00, while the strongest downtrend would achieve a score of -4.00.
--- Written by Christopher Vecchio, Currency Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.