Article by ForexTime
A deluge of UK Date is highlighted by Scotland’s independence referendum schedule for this Thursday, along with inflation, labor and retail sales data, and the BoE’s Quarterly Bulletin on Tuesday and minutes to the September Monetary Policy Committee meeting Wednesday. While it’s a close call, the fear of negative economic consequences and the lure of fresh devolution pledges should do the trick for the significant portion of voters who don’t hold a clear-cut opinion. A “no” result should spark a relief rally in sterling and U.K. asset markets.
The technical picture on the GBP/USD, shows that the currency pair has formed a bottom and will likely hover near currency levels for the balance of the week. Today, traders test resistance near the 10-day moving average at 1.6270. Support is seen near the recent lows at 1.6050.
Momentum on the currency pair has turned positive as the MACD (moving average convergence divergence) index generated a buy signal. This occurs when the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread. The index moved from negative to positive territory confirming the buy signal.
The RSI (relative strength index) which is a momentum oscillator that measures overbought and oversold levels has edged higher with price action and is now printing at 31, moving out of oversold territory. The combination of this movement and the MACD buy signal is a good sign for the pound.
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