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Brexit

ridethepig | BOE & FED ComboThis is a quick update to do with pricing in rates, or what's already priced in rate market ... I wont try my best to keep it short and sweet. I have been receiving many PM's and comments around how do we know when the Fed cuts are fully priced in? For example the -50bps that the market forced earlier in the week...everybody knew they were coming, they just didn't know it would be a surprise before the meeting. When it comes to the fundamentals and pricing in rate cuts, the macro is slightly different on each side. The reason it's different is because of timing and placement in the economic cycle. On the UK side, when we walk forward, the further out you go in time, the more relevant Brexit becomes. Why? The market has been incrementally pricing as we've gone along... doing it in small pieces because that's how markets like to move. The market didn't sit at the highs saying well we've got a new fiscal budget coming with tax cuts on the horizon, the taps on full blast and BOE ready to bend the knee, so lets start selling GBP and suddenly GBPUSD was down 300 ticks. Then markets looked at the 1.275x lows and did another forward walk, this time saying there is no point in going lower because of Fed cuts via coronavirus short-circuit, these are not fully priced so lets take another test of the 1.300x highs as there is more money to be made in the slow train !!! The macro traders know this, a BOE intervention is only a matter of when and if they can wait till the meeting. We have the budget next week and a very aggressive Fiscal policy may offset the need to act inbetween although, another they will not appreciate another hammer in UK Equities so eyes there to begin the week. Mostly when talking about whats being priced in, it's on the incremental level. So you will remember the GBP devaluation we are trading via Brexit: This is the future, what the market will try and do is price it all in small increments. The biggest moves, the ones with real volatility will come only sessions before the actual fact of Brexit annihilation. The market is not interested in these small 50 ticks or 75 tick retracement, the further out you go the more relevant the macro becomes. You see here with the PM May resignation: Markets priced in a little before, but you usually don't know enough details until shortly before the fact. Then before the announcement, maybe price moved 100 ticks... then markets expect it to be hawkish ... if that's the case with Boris then it gets priced and if they do not deliver then it will be priced back out. For the technical 🗺 Steel Support 1.241x <=> Strong Support 1.258x <=> Soft Support 1.275x <=> S/R Flip 1.293x <=> Strong Resistance 1.310x <=> Steel Resistance 1.321x It's macro ... the titanic takes a long time to turn ... Good luck all those in GBP and UK assets, here tracking a pullback in GBPUSD via BOE intervention and -50bps front loaded cut. I don't think they will be able to wait till the meeting! Thanks for keeping the support coming with likes, comments and etc!!
Short
by ridethepig
7
Ascending triangle - Long opportunity for GBP/USD on 1-hr chartA pretty good ascending triangle forming clearly on the GBP/USD 1-hour chart which is applying strong bullish pressure on the $1.2845 - $1.285 resistance level (white horizontal line). - After failing multiple times to pass the $1.275 support line (red horizontal line), the cable is now gradually proceeding towards the $1.2845 - $1.285 resistance level. - Price action also shows that the pair has been struggling to breach the $1.2845 - $1.285 resistance level, but a slowly forming ascending triangle could send it beyond this resistance level and send it towards the $1.29 resistance level (light blue horizontal line) and even possibly further towards the $1.295 resistance line (yellow horizontal line), although less likely due to the risk of Brexit trade negotiations going wrong. - Therefore, the pair is starting to look a bit bullish. However, these are quite uncertain times; with the Coronavirus outbreak, the U.S. presidential election and Brexit trade negotiations, I'd say it is hard to predict what may happen next. Note: I am not responsible for your trading decisions. It is solely your responsibility to make your own decisions ;))
Long
by michaeldobfx
China problems, Central Banks & euro riseThis week begins to give a first idea of ​​the economic consequences of the epidemic (so far in the context of China). We are talking about the manufacturing PMI index for China, which fell to 35.7 in February (compared to 50 in January). The non-manufacturing index came out even worse, showing a value of 29.6 (the lowest in history). Recall that any value below 50 indicates a decrease in economic activity. And this is only the first swallow. Then there will be new indicators, and each of them will plunge financial markets into an ever greater depression, at least for some time. Meanwhile, in China itself, the epidemic continues to decline rapidly. In Wuhan (the epicenter of the epidemic), they even began to close the first temporary hospitals due to the lack of patients. But the relay race in China is confidently intercepted by the world as a whole. South Korea, Italy, Iran - current epicenters, which are also not localized, but, on the contrary, spread the virus to other countries. If we draw an analogy with China, then at best for the next month we will find exclusively disappointing news. So you should not count on something good from March. Accordingly, the outcome from risky assets is likely to continue, respectively, gold and other safe-haven assets will find fundamental support. This week we will continue to use the bundle of buying gold - buying USDJPY as a promising medium-term position. In our opinion, the strengthening of the yen, if it continues, will be limited, but the opportunities for gold growth look much more extensive in this regard. Our disbelief in the significant strengthening of the yen is due to the fact that Japan is experiencing serious economic difficulties and traditionally one of the components of the equation to solve them was the devaluation of the yen, so the Bank of Japan is either around 107 or about 105, but most likely it will intervene and prevent the yen from strengthening. In general, central banks are again in the spotlight. Everyone expects salvation from them. As it was during the crisis of 2007-2009. So far, they live up to expectations, since all key central banks have noted rather aggressive statements about their readiness to act. Markets traditionally focus on the Fed. This is mainly due to the current difficulties of the dollar and the frank success of the EURUSD pair. With each new hundred growth points of EURUSD, our desire to sell a pair grows stronger, as does our desire to increase transaction volumes for sale. Part of the dollar’s problems lies in the plane of the presidential election. We try to minimize the analysis of the political plane, focusing on the economy. But today is the so-called Super Tuesday. The day when 1344 of the 1991 Democratic Party delegates cast their ballots for a particular candidate. So far, Sanders is the undisputed leader (probability of victory = 57%), but Biden still has chances (probability of victory = 31%). So the day for the US political sphere is very significant. The pound was under pressure yesterday due to the negotiation process between the UK and the EU on a trade agreement. There is already a familiar game of tug of war and trade for the best conditions, tied to mutual threats. As in the case of Brexit, we prefer to see not the current noise, but the perspective. And it is such that the parties are likely to agree in one form or another. Accordingly, the pound will receive its positive sooner or later. So in the medium term, we do not see any problems for medium-term purchases of the British pound. Rather, on the contrary, we see good shopping opportunities. In current conditions, sales of the EURGBP pair seem ideal to us.
Short
by Trade24Fx
2
GBPAUD and GBPNZD Reversal Set UpsWith all the craziness happening in the equity markets, been looking to the Forex market for some set ups pertaining to my system. GBPAUD had a fake out pattern confirmed. We had a fake out and then a close below this fake out candle. Again, this is why we await candle closes. To avoid being faked out. Wicks are telling, but it is the second candle that matters and gives us the trigger. We got that break, and now awaiting our first lower high swing. Trigger for a short already there, but if you are not in yet, I would await the lower high to form here. GBPNZD is also looking tempting here. A nice uptrend with well defined higher lows and higher highs. We are then seeing a test of a previous higher low swing level and it seems we may make a head and shoulder pattern here. At a very important support/flip zone as well. Will be awaiting the break and close here.
Short
by Uncharted-FX
Are you seeing what I'm seeing?Descending triangle on the GBP/USD: - Price keeps bouncing off $1.29 support level (red horizontal line) - 1-hour chart clearly shows a perfect example of a descending triangle, getting narrower between the upper downwards trend line and the major $1.29 support level - Given a situation where Brexit trade talks fail and tensions rise even more between London and Brussels, then eventually we could see a breakout below the $1.29 level at the end of the descending triangle - However, if Bernie Sanders keeps dominating in the US, then things might go quite differently. Though indication of a bearish pattern is strong here. - If bearish breakout happens, next major support level is $1.28 (green horizontal line) **Note that I am not responsible for your trading decisions. It is solely your responsibility to make your own decisions ;)
Short
by michaeldobfx
ridethepig | Continue To Sell GBP On Rallies Here tracking 1.295x as the level to recycle and load more shorts. Well done those following from the original short-term swing which was triggered on the cabinet reshuffle (see diagram below). As widely expected GBP suffering as markets began to look towards the EU negotiations kickstarting in March. Both sides are very wide apart and no-deal Brexit looks set for year end. The flows are all in-line so far with the long-term macro picture. It is playing out perfectly and looking to sell rallies with risks skewed towards the downside makes sense to me. Medium term targets are located below at 1.21 and 1.15 - these are in play for 1H 2020 if things get very bad with USD strengthening via panic around virus impact and risks while GBP softens as UK lose PPP in the immediate term. Well done those already selling Sterling, and good luck anyone look to load more on rallies. I am happy to sit short and work the sell-side in Cable. The ideas are no less imaginative than those of last year which turned out to be a 1,000 tick trade: Thanks as usual for keeping the likes, comments and charts coming !
Short
by ridethepig
4
EURGBP Is Setting Up to Complete a Regular Flat Pattern.EURGBP decline from August 2019 high can be seen as a classic Elliot Wave five-wave impulse pattern, labeled 1-2-3-4-5. Every impulse is followed by a three-wave correction. That is what seems to be in progress in EURGBP's case. The rally from wave 5 low unfolded in three-wave, followed by another three-wave decline which must have been wave "A" and "B" of a larger A-B-C flat pattern. If this count is correct, this corrective scenario best fit in for a 3-3-5 regular flat pattern according to EW. So it makes sense to expect a five-wave rally in wave "C" to complete the corrective cycle. However, the theory states that once a correction is over, the larger trend resumes in the direction of the impulse. Here, once wave “C” is over, a bearish reversal can be expected. What's your thought on EURGBP?
Long
by Veejahbee
2