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Pound (GBPUSD) May 2017 OverviewThe GBP was heavily influenced by Theresa May’s announcement of a British snap election in June. The aim of the election is to strengthen May’s hand ahead of the “Brexit” negotiation, but the latest polls show that her party’s advantage over the Labour opposition is shrinking. The market could be disappointed if there is no much change in UK’s position regarding a softer “Brexit” deal, which is likely to happen. Despite longer term valuation models like the purchasing power parity (PPP) suggest that the British pound is currently undervalued by some 700 pips, Sterling could depreciate even further in the aftermath of the UK snap election. We are expecting the Pound to move lower towards 1.25 area.
by KarYong
EURUSD: Long term outlookThe downtrend in the Euro is in danger here. If EURUSD stalls, or rallies higher, there's a chance that it breaks the 2-month timeframe downtrend mode resistance, igniting a fierce rally, after absorbing all overhead supply. I deem it as a lower probability event, but a very significant one, if we do indeed make the downtrend fail. I think we can see a huge rally. This is a very crowded trade, so I'll focus on attemtpting to catch the dollar fall, while still being long good value US equities. If by the end of June, we don't hit 0,98898, we could anticipate price breaking higher in time. The minimum required time is signaled on chart. Good luck, Ivan Labrie.
Long
by IvanLabrie
GBPUSD SHORT - following improvement in US Jobless ClaimsTechnical: On the 4 hour A FX:GBPUSD chart, a widespread bearish candled formed. This was followed by a second, much wider spread candle, both of which were validated by increasing volume. Fundamental: Initial jobless claims were released in the US at 10:30UTC+10 with a result of 236K down from 238K in April and better than forecasted 245K. All in all a positive result. In the UK, BOE held rates steady today, lowering 2017 growth forecasts. Relational: US Bond yields up across the board suggesting a flow into FX and equities.
Short
by BaseTrader
1
BOE Interest Rate Hike Sooner Rather Than LaterThe BOE’s interest rate decision scheduled for May 11 will be the main event risk on the UK economic calendar. Based on the market consensus the BOE is expected to keep its policy rate unchanged. However, what is far more important from the pound’s perspective and for the market is how many BOE policymakers might lean towards tightening and vote to raise interest rates. What is particularly important with this interest rate decision is if there is going to be any material change in the MPC official bank rate vote. The consensus is for the BOE to hold rates unchanged with a 1-8 vote. Another theme that hasn’t generated a greater traction for GBP/USD exchange rates is the BOE‘s change of tone towards its current monetary policy. This is not an active market theme thus the market didn’t price in the possibility of interest rates going higher. The market works like a discounting mechanism and we’ll start to see in the near future this fundamental theme to drive currency exchange rates as an effort to price in advance the effect of a possible rate hike. At the end of last month, Michael Sounders one of the BOE policymakers suggested that interest rates can rise as both inflation and growth are on target and even to exceed BOE’s forecasts. Saunders is the second voice to support higher rates after Kristin Forbes, another MPC member, who already voted in March to raise rates. An effective 7-2 vote can be the catalyst for speculation that interest rates will finally go up. This seems the right move because historically speaking the BOE has always followed the FED footsteps when it comes to the monetary policy. US vs. UK Interest Rates The inflation rate has reached levels not seen since September 2013 after jumping to 2.3% last month (see chart below) above BOE target. Despite the UK GDP growth slowdown to 0.3% in the first quarter, the growth forecast for the UK economy remains positive and sooner rather than later BOE will be forced to change its rate policy. It will be difficult for GBP/USD to sustain any move above 1.3000 big psychological number without a solid fundamental backdrop. Central banks at the end of the day they do fundamentally drive what is happening in the currency. With the general election coming up in the UK the importance of the BOE has been slightly sidelined. The elections had implications what the BOE will do, but it’s all about relative action from the central bank’s perspective. There is less political uncertainty now than it was before and after the Brexit event. The conservative party is headed for a decent victory in the general elections so there is a good case to be made for speculators to shift their focus towards the interest rate theme. The heightened uncertainty over EU’s economic and political landscape can also be the driver for more UK capital inflow. Based on the Wave Analysis , we are expecting some selling pressure to push the GBPUSD lower. A bearish divergence has been forming with a confluence of a 123.6% Fibonacci ratio. A bearish break below 1.2825 can potentially see more selling momentum for the GBPUSD, pushing it lower towards 1.2486 area.
Short
by KarYong
Dragon XD Setup and outlook for GBPAUDGBPAUD looks to consolidate in between 1.662xx and 1.670xx until the start of the European session Dragon setup will give me a indication of market direction but I wont be using it as an entry until further confirmation. If GBP breaks the major trend line I will be looking to go long after further analysis but if it breaks the hourly resistance line I will be looking to short this pair. I expect the bears are looking to complete another Brexit wave as the Pound continues its downtrend into a tighter zone. GBP is pushing further into overbought conditions and is now at resistance of a Brexit dynamic trend line dating back 2016. High market volatility for this pair is expected as BOE news release (4AM EST) will push market markets to either reverse or breakout on this pair. AUD movements will be under the influence by Asian Data releases in the past 24/7 and Employment and Unemployment data releases. UK's inflation rates and CPI data has push the pound to surpass expectations against this bearish bias of the economical docket. Quite a bit of uncertainty for this pair this week but I will be target opportunities on both side of the fence. I will update this idea with a setup
by FXRCAPITAL
Anything Can Happen . XRP Ripple with the BanksAnything Can Happen when daytrading with the Banks. Now that a simple Google Search can let you know that JP Morgan is working with Ethereum, so too one discovers Ripple has heard public support from the Bank of England, Banks in Japan, Dubai and Europe. I'm looking for a Bullish year for Ripple with lots of Price Action similar to Ethereum. We can start looking at cryptos like the dollar bills in our pocket. Bitcoin is the big shiny piece of gold, home base. Litecoin is our silver. Dash may be the $100. Ethereum $50. And we shall see where Ripple positions itself to be. If the Big 10 Coins look steady in the fall, look for STEEM, BURST, GOLOS, DOGE to join the contenders for the USD.
Long
by allthemoneys
2
GBPJPY: If it breaks the weekly mode, it can soarI'm long $GBPJPY, as part of my FX portfolio, I think we might see an increase in FDI in Great Britain, after the Brexit vote. The Yen lets foreign investors acquire free money to invest in US and UK assets. The chart is interesting here, so it's probably a good pair to trade on the long side. The spread in the UK stock market compared to the European one is interesting as well. I like the potential short squeeze in the Pound to further boost this trade once commercial shorts unwind. Good luck, Ivan Labrie.
Long
by IvanLabrie
GBPUSD: Intraday trend analysisGBPUSD appears to have an 8h timeframe trend here. There's risk of this becoming a 'Brexit flash crash #2' situation, considering how the intraday trend time and price target imply a potential turning point when the news come out. My reccomendation is, either to stand aside. I think the market will frustrate the most people, and not start a big trend, neither up or down, simply, staying in a larger triangle/sideways pattern consolidation. If the market is range bound, fading the range extremes will prove to be profitable. I have my doubts about the dollar, since it appears to have a major topping pattern, but I reccommend caution here, perhaps it's best to trade after the news effects are known, so it might be feasible to trade technical short term trends, both up and down in FX, for a good while. If this indeed breaks up, then we could see a trend gain traction in the long term, which would be beneficial for emerging markets, and also give us more interesting trading opportunities. Let's wait and see. Cheers, Ivan Labrie.
by IvanLabrie
6
SPX: Breakdown of the downtrend, and longer term signalsSPX is getting extremely interesting, now that VIX has spiked for more than 5 points on the current market decline. I'm monitoring the decline to catch the exact bottom in the market, which I think can end up matching the bottom in oil, and the energy sector, and a great chance to add to my EEM longs too, and acquire more latin american stocks. I updated my time at mode analysis for SPX in the yearly timeframe, and there's a target at 2987usd, so, we might end up seeing that after the correction bottoms. Best of luck, Ivan Labrie.
FX:SPX500Long
by IvanLabrie
5
GBPUSD: Now we have confirmation for my stupid short idea...The technical chart has confirmed a weekly downtrend in the Pound as I expected, and despite being trailed out in profit, I'm looking to reenter shorts with force at market open, with a significant position size, aiming to risk 0.5-1% if the idea fails. In this news article, it's hinted that May will talk about a Hard Brexit in her Tuesday speech, which would give the bears some ammo to drive the pair down with momentum: www.bloomberg.com The fundamentals are strong for the dollar, and on a relative strength basis, the US dollar has the upper hand, both fundamentally and technically, which favors bearish trades in the $GBPUSD pair. Downside targets are signaled on chart. We have: 11 week 'Time at Mode' downtrend signal, confirmed on close last Friday, target is 1.13436 initially, to be hit before March 24th ideally. 13 day downtrend, continuation of the decline after the US dollar interest rate hike on December which kicked the decline off. After recently breaking down under the Presidential election key level and retesting it at the recent top, the Pound accelerated down, flashing the technical signal in my previous publication. It retested resistance and confirmed a daily downtrend on Friday. Targets are 1.18864 and 1.17693, to be achieved by Jan 31st or sooner. Keep an eye on these levels for a potential reaction in price. Also watch the strange flash crash day key levels, and the high and low of that day, since it may prove to be significant once again, although it's still a mystery what caused that event. A move above 1.21717 would invalidate the daily signal, and above 1.23854 the weekly signal would be rendered a failure, and immediate upside implied on a breakout of this resistance. Upside for such an event would be huge, since it would squeeze bears big time, sending the Pound up to 1.34406. I labeled this on chart, but it would be a shocking turn of events, and a lower probability. I'm open to going long if we break above this weekly zone, since the squeeze would result in a profitable trade, offsetting loss from bearish trades. Good luck! Ivan Labrie
Short
by IvanLabrie
27
GBPUSD: Long term decline analysisThis is the long term outlook for GBPUSD, we can see that the signal here has been working well, and although I had initially identified it as a quarterly signal, it belongs to a higher timeframe to correctly portray the activity in it according to the 'Time at mode' methodology. For now, we'd have to wait for this year to end to judge the future shorter term targets to validate the bearish momentum, but we can already keep the target in mind, to flip long after covering any short we have once hit, or if the time expires, or, to identify long term resistance levels to short against on rallies. The daily chart tells us to wait, and so does the weekly for now, so, I'll keep an eye on it to short rallies, or the confirmation of a lower timeframe 'Time at mode' downtrend signal like the one in related ideas. Good luck, Ivan Labrie.
Short
by IvanLabrie
2
GBPUSD: Time at mode uptrend might give us a great short soonGBPUSD has an interesting chart here, with very clear resistance levels and a stop loss level for short trades. We will be looking to short the top of the current uptrend, to rejoin the long term decline in the Pound. I think the uptrend is doomed from the get go, being a pullback in a downtrend, so, I will look to fade the rally when safe. The chart shows a potential signal that could take price to the vicinity of 1.2830, but, there is a massive supply level at 1.2767 that could make the uptrend fail. Look for shorts above 1.2767 ideally, you can take a long term position and spread the selling over multiple days, using the stop on chart. If the analysis is correct, we'll get more confirmation for a precise technical short entry soon, for now, wait for updates here, and watch it. Going long isn't reccomended, although this will probably rally while EURUSD retraces. Cheers, Ivan Labrie.
Short
by IvanLabrie
4
GBPJPY: Speculative long positionWe have an interesting setup here, but it's not for the faint of heart. Risk is big in the Pound pairs, so only risk 0.5% on the long here. The spread with USDJPY might close soon, so you might have sizeable upside in this pair. Invalidation is a move back under last week's open for this trade idea. Good luck, Ivan Labrie. ps: I'm still unsure of the GBPUSD pair, so I'm currently flat, although I'd reccomend caution trading it. Size trades small so you have reasonable risk. Look at the ATR indicator for clues.
Long
by IvanLabrie
GBPUSD: Brave traders, here you have a short ideaWe have an interesting setup in GBPUSD. The loss of momentum in the rally leads to a viable short setup, either at market open, risking a rally to 1.2624, or shorting on a new daily low, risking a new daily high. I expect the next leg to go down, but I'm not sure if we can trend down right away. It's more likely going to chop and gyrate between key levels until the end of the year. We can accumulate short positions on each rally, and with some luck, we might even be able to keep them with break even stops if things go really well. Good luck, Ivan Labrie.
Short
by IvanLabrie
3
BOE monetary policy and rate decision - Saving the Pound? On Thursday BOE will publish its rate decision and monetary policy summary. Following latest Carney's speech, people now know that BOE is starting to monitor the currency's weakness following Brexit - They will pay attention to what BOE will have to say about it in the coming meeting. Technically 1.21 is the current support zone. The price is holding above it and created couple of Intraday reversal signals once it touched it... Still the price is below the Fast MA line and hasn't created any higher high or higher low till now. With FOMC before BOE meeting we can see GBPUSD pressing down towards 1.21 again and perhaps even 1.2. Will it be a buying opportunity towards the BOE meeting? Will be interesting to monitor - We will get a potential confirmation signal if GBPUSD will climb above the MA line for the first time since its Flash Crash. Read more trading ideas in my newsletters (link in signature)
Long
by themarketzone
GBPUSD: Fighting my biasI don't want to long the dollar right now, and many of my trades are centered around strength of commodities, oil, equities, so a dollar long, pretty much would rain on my parade. Now, I also don't want to be exposed to strongly correlated trades only, and not diversify, and I definitely don't want to trade with blinders on, and avoid taking good trades due to my personal biases, whatever they might be. So, I play Devil's advocate for a bit here, and try to decipher the GBPUSD chart. I'm looking at the GBPUSD and inverted GBPUSD weekly chart here. It appears like relative strength has been bad for the Pound and recent news about the Brexit 'implementation' have hurt Pound bulls considerably, making the bullish technical setups we had fail. I see we have a weekly time at mode signal in play, a weekly range expansion bar, and a huge downside (or upside target in the case of the inverted Pound chart). I'm sure this is a stupid trade, so probably, it a good one to take. What are your thoughts? Leave your comments behind. Good luck if you follow my idea. Cheers, Ivan Labrie.
Short
by IvanLabrie
4