The nine-day relative strength index (commonly referred to as the RSI) has reached levels that have, in the past, been associated with short-term peaks in the pound GBPUSD, -0.2158% according to Kit Juckes, chief currency strategist at Société Générale, in a Tuesday research note.
“Once they roll over, bears have the green light,” Juckes said.
The RSI is used by technical analysts to measure the momentum behind an asset or currency. Over the past year, readings of 70 or greater in the nine-day RSI have preceded selloffs in the pound-dollar pair.
In the latest sign that the economic fallout from the Brexit vote hasn’t been as severe as feared, the U.K. services purchasing managers index bounced back to 52.9 in August, compared with 47.4 the previous month. Readings above 50 indicate growth.
Investors are now turning their attention to Prime Minister Theresa May, who is preparing to begin negotiations with European Union leaders over the terms of the U.K.’s exit from the trading bloc.
A key issue for investors is whether Britain can retain access to the single market—the EU’s free trade area.
“Any sign that the UK is considering a ‘hard Brexit’ instead of keeping EMU market access would likely terminate the GBP rally abruptly,” said Hans Redeker, head of global currency strategy at Morgan Stanley, in a note to clients published late last week.
The pound traded at $1.3405 on Tuesday, up 0.8% from its late-Monday level, as a weak reading on U.S. services-sector activity weighed down the dollar against a broad swath of rivals.
Click here for Free Signals OR Give A Missed Call : +60350219047 Follow Us On Twitter : www.twitter.com/epicresearchmy Like Us On Facebook : www.facebook.com/EpicResearchMalaysia Need Any Assistance Feel Free To Mail Us at : info@epicresearch.my
No comments:
Post a Comment