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Poundsterling

The Pound Is Rising on Additional Interest Rate Hike ExpectationThe Bank of England (BoE) has unexpectedly lifted its interest rates to 0.25% from 0.1%, which is the rate at which rates have been set for the last three years without any changes. The move was made on Thursday as inflation in the United Kingdom jumped to 5.1% year-on-year in November from 4.2% a month before. Moreover, the BoE indicated in its statement that inflation would continue to expand to 6% by April 2022, well above its 2% target. The United Kingdom has become the first developed country that has hiked interest rates. Investors suggest that monetary policymakers are ready to make an additional interest rate hike by 25 basis points to 0.5% next February. The Federal Reserve (Fed) announced this week that it would increase its tapering to $30 billion a month starting mid-January from $15 billion, where it stands at the moment. This could mean an end to its bond-buying program in March 2022. According to the Fed’s dot-plot chart the American monetary watchdog may raise interest rates three times next year and another three times in 2023. What could this particularly mean? In the first place the U.S. Dollar would be a leading party to the European single currency as the European Central bank (ECB) noted on Thursday it will continue with its stimulus bond buying program beyond April 2022. However, some spikes of the Euro should not be excluded. The Pound becomes a leader vs the Greenback, while not only receiving technical reasons for a rally, but fundamental ones too. Once again, I have to note that the Cable is moving alongside the “falling wedge” reversal pattern that may push the Cable to 1.3800. The resistance line of this wedge was broken last Friday, and last Thursday the Cable received additional reasons for the rise finishing the day above EMA13 and EMA21 on the daily timeframe chart. The Pound may receive an additional spin as the “morning star” pattern would be completed this week. The next target for the Cable would be 1.3400-1.3450 that is a resistance of the December 2020 and the September 2021 lows. The closest support level is at 1.3280-1.3285, where it would be certainly interesting to open buy positions.
Long
by scavoanastasiia
SHORTING GBP/JPYTechnicals: As it currently stands, HJ is at a strong level of supply where we have started to see selling pressure come into play. We’ve seen a bearish engulfing, followed by a double top formation at supply. The double top was confirmed after a shooting star on the 30M timeframe. This is my confirmation to get into the trade, however, Monday usually contains manipulation, so I tend to not trade on Mondays, despite this, I like the look of this trade and the risk to reward ratio is there (4.4:1) Fundamental summary: The UK are looking to implement tighter Covid restrictions to reduce the spread of the new Covid variant ‘OMICRON’, this is likely to cause the pound to drop in value against the yen which is seen as a safe haven during times of uncertainty – known as risk off. Please let me know your thoughts and trade with caution!
Short
by TomBray1
GBPAUD Overview from high TFGBPAUD was trading within a channel that it recently broke out of and now retracing back down. As we can see on the way down we broke a key order block which can now become a breaker block (resistance) as the price just tapped back into it. Right below we can see we have another key OB which the price can move down into. If we break back into the breaker block we can see the price moving higher, however if the resistance holds we can move into the lower OB marked.
by opes_trading_group
GBP USD - FUNDAMENTAL DRIVERSGBP FUNDAMENTAL BIAS: WEAK BULLISH 1. Monetary Policy BoE credibility took a hit in Nov when the bank voted 7-2 to keep rates on hold and took a clear U-turn compared to hawkish comments from the likes of Bailey and Pill. Going into the meeting markets had fully priced a 15bsp hike in 4Q21, and even though analysts were divided on whether that hike would be in Nov or Dec, the bank’s statement and tone saw markets pushed back hike bets. This came as a result of the bank’s dovish tilt regarding GDP, CPI as well as a change of tone which said hikes would only be appropriate in the coming months if the labour data comes in line with the bank’s projections. We were anticipating a violent repricing for med-term rate expectations stressing that rates markets were too aggressively priced, but the U-turn in tone surprising and placed lots of focus on incoming labour & CPI data to gauge when lift off will occur. The bank pushed back against attacks on their credibility and said they won’t endorse market rate pricing. Overall, it was a dovish tone, and the hit to credibility means markets will be more careful with jumping the gun on their forward guidance going forward. As the bank bases their economic projections on a market implied bank rate, there is chances that things like GBP and CPI see upward revisions if the med-term market expectations for higher hikes trade a bit more realistic. 2. Economic & Health Developments Even though activity data has been slowing, the economy is not expected to fall off a cliff by any means. Furthermore, the very solid beats across the board in recent economic data have for many solidified the odds of a 15bsp hike in Dec. It was interesting to note that both BoE’s Pill and Bailey, even after the solid data, offered some slightly sobering remarks last week which some took as a sign that a Dec hike is not a guaranteed decision just yet. Of course, the Oct jobs print in December will be very important for markets as another beat there will leave the BoE with very few reasons not to hike rates. Interestingly, not even the more optimistic comments from the likes of Haskel (dove) was enough to drag the GBP out of its slumber. 3. Political Developments Even though a Brexit deal was reached last year, some issues like the Northern Ireland protocol remains, and with neither side willing to budge it seems like these issues are here to stay for now. There has been heated rhetoric from both sides with the UK threatening to trigger Article 16 and the EU threatening to terminate the Brexit deal if they do. For now, these are just threats, but any actual escalation could increase the odds of seeing so risk premium built into Sterling. Also keep the fishing challenges with France in mind as well. 4. CFTC Analysis Latest CFTC data showed a positioning change of -4320 with a net non-commercial position of -38899. Sterling is now the third largest net-short among the majors and also dipped into net-short among leveraged funds as well. That shows us sentiment continues to deteriorate for the GBP after the Nov 4 policy meeting, and that is despite recent economic data coming in much better-than-expected. 5. The Week Ahead Patience will be very important for the week ahead when it comes to the GBP. Friday’s comments from BoE’s Saunders were quite surprising, with the most hawkish member on the MPC sounding strangely dovish on the eve of the Dec policy meeting. Saunders explained that the Omicron variant could mean that there is scope to wait for more data before adjusting policy, if adjusting policy is necessary (that doesn’t sound like a hawk ready to vote for hiking rates in a few days’ time). Interestingly we’ve seen some of the more dovish members among the MPC take a slightly more optimistic and hawkish turn with Haskel giving a green light for rates to move higher in we see another solid job print next week. Thus, for now, until we get the job data, it might be best to keep Sterling on the side lines for now. USD FUNDAMENTAL BIAS: WEAK BULLISH 1. Monetary Policy Another bank that was hawkish in deed by dovish in word in their Nov policy decision. The Fed announced tapering as expected, with purchases to be reduced at a pace of $10bln in Treasuries and $5bln in MBS per month and explained that a mid-2022 conclusion is their base case. There were also some hawkish language changes about inflation , with the bank dropping previous comments that called inflation transitory and replacing it with ‘expected to be transitory’, basically leaving some optionality to pivot more aggressively with tapering should price pressures stay sticky for too long. However, Fed Chair Powell did a really good job to put on a familiar dovish front by explaining that they see the current price pressures as driven by supply bottlenecks and still see those pressures cooling down in in 1H22, essentially giving themselves half a year of ‘tolerating’ the current inflation overshoot. Apart from that, Chair Powell explained that they would need to see maximum employment before their conditions for a lift off in rates would be met, and also explained that it’s likely that full employment could be reached by mid-2022. That endorsed the idea that a 2h22 hike is possible, but the Chair refused to provide any idea of what maximum employment would look like. On the rate front, Powell also explained that they think they can be patient with rates right now as they want more time to see in what shape the economy is in after the current covid shocks have calmed and after bottlenecks have eased. Overall, a policy meeting that was hawkish in their actions but dovish in their words. 2. Real Yields With a Q4 taper start and a faster 2022 taper on the table, further material downside in real yields looks like a struggle, and upside from here should be supportive for the USD. However, we are growing cautious of nominal yields right now as an aggressive Fed is not a positive for US10Y . But it also means there are risks that inflation expectations fall and place upside pressure on real yields. 3. Global Risk Outlook Based on the recent global economic data the expectations of a possible reflationary setup have developed as the Citi Economic Surprise Index continues to push higher. Even though this was seen as a possible negative for the USD, the recent hawkish tilt from the Fed (accompanied by the Omicron variant) has seen drastic curve flattening in anticipation that the Fed might be on its way to a policy mistake, and we could see a possible repeat scenario like we had back in 4Q18. If that happens, it should be an additional tailwind for the USD, which means for now a lot of hinges on the new variant. 4. CFTC Analysis Latest CFTC data showed a positioning change of +104 with a net non-commercial position of +35879. USD longs are looking stretched, and arguably have been looking stretched for the past few weeks. With large speculators at their highest level since 2019, there is some scope for some mean reversion lower in the USD. It’s also important to remember that a lot of the Fed hawkishness should now be reflected in the price. The biggest risk to upside is if the med-term growth and inflation outlook materially deteriorate from here. 5. The Week Ahead With Fed Chair Powell already giving the markets the prewarning of a faster tapering decision next week, there isn’t much that will change that with this week’s line up of economic data. The biggest even will no doubt be the CPI print on Friday, where markets are expecting a new cycle high for consumer prices. With so many expectations baked in for the Fed and with so many higher inflation projections doing the rounds, the highest tradable event for the USD this week would be a huge surprise miss as that will catch everyone by surprise and offer some decent downside in the short-term for the USD. Even though a beat in the CPI data should see further expectations of tighter policy, markets are so close to pricing in 3 hikes for next year again which means the upside on a beat might be more limited compared to the Nov CPI print.
by thunderpips
8
Today’s Notable Sentiment ShiftsCHF – The Swiss National Bank is no longer standing in the way of the franc’s appreciation, according to data published on Monday, in an eye-catching change in view of the safe-haven currency’s rise to its highest against the euro in more than six years. The former manager of the SNB’s foreign currency reserves, Thomas Stucki, argues that “if the franc stays at this level of around 1.05, a little bit above, a little bit below, the SNB won’t do a lot… They will prevent the movement below 1.04 to 1.03. Then they will step up interventions.” GBP – Sterling fell back to an 11-month low on Monday as investors weighed the discovery of the Omicron coronavirus variant on the outlook for the British economy. Commenting on the latest variant of the virus of the virus, Nomura notes that “In terms of the outlook, for the UK it’s possibly a bigger risk as the market’s long-held assumption that UK is unlikely to witness another lockdown.”
by thunderpips
3
GBPUSD - 4h - Análisis SemanalThis is one of my favourite pairs. After 1 successful week, let's go for the second week. It is the last days of November, there is a lot of indecision in the market. This is a Flash Trade. Risk 1% of your account equity. SL 1.33070 (35 Pips) TP1 1.33770 (35 Pips) TP2 1.34070 (65 Pips) Traders, if you like this idea or have your own opinion about it, write in the comments. Patience, Discipline and Good Trade! KISS: Keep It Simple Stupid. LCCJ ................................................................................................................................ Este es uno de mis pares favoritos. Despues de 1 semana de exito, vamos a por la segunda semana. Son los últimos días del mes de Noviembre, hay mucha indecisión en el mercado. Este es un Flash Trade. Arriesga el 1% del capital de tu cuenta. SL 1.33070 (35 Pips) TP1 1.33770 (35 Pips) TP2 1.34070 (65 Pips) Traders, si os gusta esta idea o tenéis vuestra propia opinión al respecto, escribid en los comentarios. Paciencia, Disciplina y Buen Trade! Manténgalo simple y estúpido. LCCJ
Long
by LCCJ
GBPUSD 2H TF : 26.Nov.2021This chart examines the GBPUSD price behavior from October 27 to November 26. This chart gives you a good overview that will make better trading decisions based on MTR strategy and channels and micro-channels. If the price reaches our desired levels, we can enter to the Buy position. Follow our other analysis & Feel free to ask any questions you have, we are here to help. ⚠️ This Analysis will be updated ... 👤 Arman Shaban : @Ar_M_An_4 📅 26.Nov.2021 ⚠️(DYOR) ❤️ To give us energy and motivation , please like and leave a comment. ❤️
Long
by ArmanShabanTrading
8
Today’s Notable Sentiment ShiftsGBP – The pound slid against the euro edged down slightly against the dollar on Thursday as traders assessed whether recent gains linked to expectations of a central bank rate hike had gone too far. Reuters noted that “investors remain wary about the timing of any move, however, after the BoE surprised markets earlier this month by keeping rates steady when many had understood the hike was coming.” While Citi also reminded that “there are longer term concerns for the currency amid wrangling between the European Union and Britain over the Northern Ireland part of the Brexit deal.”
by thunderpips
3
Today’s Notable Sentiment ShiftsGBP – The pound climbed to a one-week high versus the dollar, and a 21-month peak against the euro on Wednesday after data showed UK inflation surged to a 10-year high last month, backing expectations of an interest rate hike as early as next month. CAD – The Canadian dollar weakened to its lowest level in nearly six weeks against the greenback on Wednesday, as oil prices fell and CPI showed inflation rising in line with expectations, contributed to a drop in Canadian bond yields.
by thunderpips
Today’s Notable Sentiment ShiftsGBP – Sterling fell to its lowest level of 2021 against the dollar on Thursday as the British economy appeared to lose momentum. Reuters noted that “data released by the Office for National Statistics showed Britain’s economy grew by 0.6% in September but estimates for previous months were revised lower, leaving the economy still smaller than it was in February 2020.” AUD – The Australian dollar slid to its lowest in more than a month on Thursday, pressured by an overall disappointing employment report for October. Commenting on the release and its implications for the RBA, HSBC noted that “the key is that the unemployment and underemployment rates are now further away from full employment, meaning more job creation will be needed to reduce labour market spare capacity and put upwards pressure on wages growth. A broad-based strong wages pick-up may therefore be some time away, keeping the RBA dovish.”
by thunderpips
6
GBP USD - FUNDAMENTAL DRIVERSGBP FUNDAMENTAL BIAS: WEAK BULLISH 1. The Monetary Policy outlook for the BOE The BoE took a hit to their credibility with their November policy decision when the bank voted 7-2 to keep rates on hold and also had a very clear U-turn among some of the recent hawkish comments from the likes of Bailey and Pill. Going into the meeting markets had fully priced a 15bsp hike in 4Q21, and even though analysts and economists were divided on whether that hike would take place in Nov or Dec the bank’s statement and press conference has now seen market expectations for a hike pushed back to Feb 2022. This came from the bank’s dovish tilt regarding growth, inflation as well as a change or tone which said that hikes would be appropriate in the coming months if the labour data comes in inline with the bank’s projections. We were anticipating a violent repricing on med-term rate expectations for the past few weeks now, stressing that rates markets were too aggressively priced, but the U-turn from the bank regarding the near-term was surprising and means incoming labour market data will be key in gauging when lift off will occur. When asked about their obvious U-turn, the bank pushed back and said they won’t endorse market rate pricing, but external member Saunders did just that in early Oct. Overall, the bank delivered a dovish tone, and took a big hit to their credibility, which means markets will be a lot more careful with jumping the gun on their forward guidance going forward. A key reason why we have not changed our outlook for the GBP to bearish after the Nov BoE meeting is because the forecasts for both growth and inflation were conditioned on an implied bank rate of 1% by end 2022, which seems highly unlikely. Thus, after this week’s repricing, if rates price in less than 1% by 2022 then the conditioned path for growth & inflation should be higher again all else being equal. 2. The country’s economic developments The successful vaccination program and subsequent reopening of the UK economy was a big positive for Sterling from the start of the year, but with a lot of those positives already in the price and some expectation of stalling growth, the upward momentum will get tougher in the nearterm. Also, alongside the BoE’s dovish tilt incoming economic data will be crucially important for markets to gauge the rate path. 3. Political Developments Even though a Brexit deal was reached last year, some issues like the Northern Ireland protocol remains, and with neither side willing to budge it seems like these issues are here to stay for now. There has been heated rhetoric from both sides with the UK threatening to trigger Article 16 and the EU threatening to terminate the Brexit deal if they do. For now, these are just threats, but any actual escalation could increase the odds of seeing so risk premium built into Sterling. Also keep the fishing challenges with France in mind as well. 4. CFTC Analysis Latest CFTC data showed a positioning change of +94 with a net non-commercial position of +15047. Keep in mind the CFTC data released on Friday was only updated with positioning data until Tuesday 3 Nov, which means the big flush lower in Sterling after the BoE meeting will only be reflected in next week’s data. Thus, we would anticipate seeing a sizeable increase in net-short positioning following the Pound’s reaction after the meeting. With the week light on the calendar front, markets will turn attention to incoming comments from Governor Bailey (sigh). Apart from that we’ll be keeping a close eye on key technical levels to determine whether downside momentum could be stalling out. USD FUNDAMENTAL BIAS: WEAK BULLISH 1. The Monetary Policy outlook for the FED Another bank that was hawkish in deed by dovish in word in their Nov policy decision. The Fed official announced tapering as expected, with purchases said to be reduced this month at a pace of $10bln in Treasuries and $5bln in MBS per month and explained that a mid-2022 conclusion is still their base case. There were also some hawkish language changes about inflation , with the bank dropping previous comments that called inflation transitory and replacing it with ‘expected to be transitory’, basically leaving some optionality to pivot more aggressively with tapering should price pressures stay sticky for too long. However, Fed Chair Powell did a really good job to put on a familiar dovish front by explaining that they see the current price pressures as driven by supply bottlenecks and still see those pressures cooling down in in 1H22, essentially giving themselves half a year of ‘tolerating’ the current inflation overshoot. Apart from that, Chair Powell explained that they would need to see maximum employment before their conditions for a lift off in rates would be met, and also explained that its likely that full employment could be reached by mid-2022. That endorsed the idea that a 2h22 hike is possible, but the Chair refused to provide any idea of what maximum employment would look like. On the rate front, Powell also explained that they think they can be patient with rates right now as they want more time to see in what shape the economy is in after the current covid shocks have calmed and after bottlenecks have eased. Overall, a policy meeting that was hawkish in their actions but dovish in their words. 2. Real Yields With a Q4 taper start and mid-2022 taper conclusion on the card, we think further downside in real yields will be a struggle and the probability are skewed higher given the outlook for growth, inflation and policy, and higher real yields should be supportive for the USD in the med-term . 3. The global risk outlook One supporting factor for the USD from June was the onset of downside surprises in global growth. However, there has been a growing chorus of market participants looking for a possible bounce in growth data in Q4 after the covid and supply chain related slowdown in Q3. If we do indeed see a pickup in growth, while inflation is still elevated, that would mean a reflationary environment, which is usually a negative input for the Dollar, so we want to keep that in mind when assessing the incoming US economic data in the next few weeks. 4. Economic Data With the FOMC in the mix, the other economic data points largely took a back seat this past week, with even NFP not really creating a lot of meaningful or sustainable volatility . We did however see a late session sell-off in the Dollar, which was arguably more driven by technical factors as the Dollar topped out at key technical resistance and could also have been some profit taking after the recent push higher. This upcoming week’s main economic event will be Oct CPI and will be an event worth keeping on the radar after this past week’s FOMC. 5. CFTC Analysis Latest CFTC data showed a positioning change of +525 with a net non-commercial position of +34982. Positioning isn’t anywhere near stress levels for the USD, but the speed of the build-up in large specular positioning has been sizeable on a 1-year look back period. Thus, even though the med-term bias remains unchanged, it does mean the USD could be sensitive to mean reversion risks just like we saw on Friday while we are still trading close to YTD highs.
by thunderpips
1
GBPUSD - Further DeclineI have been following GBPUSD's recent decline from the 1.38000 level over the past few weeks across various intra day positions. I am anticipating price to fall further toward the September low at the 1.34000 psychological, which is also it's lowest price since December 2020. I have entered another short position today following the retest of the 1.36 level, which i am hopeful can hold as resistance. Let's see how this plays out over the next few days and if our target can be reached.
Short
by MMQ_FX
1
Do not miss this buy opportunity on GBPJPY with target of 155.00🔍GBPJPY has reached a very significant level which is around 153.00. The market respected this level several times, acting as resistance. We saw a strong breakout of this resistance where price was pushed to 158.235. As the market got back to this level of 153.00, I expect it to rise and the level acting as support this time. ❗️Take note: Do not take my idea as a general advice or signal and act upon it without your own analysis. I encourage you to follow me that when I post new updates you get informed of this. Please support this idea with a like and feel free to share your thoughts and opinions in the comment section below 👍 Many wishes and trade smart!
Long
by Forexintelligence_NA
1
GBPCAD LONGHey Traders, in the coming week we are monitoring GBPCAD for a buying opportunity around 1,675 Respecting the ascending Monthly Trend in combination with the Monthly Demand Zone. Once we will receive any Bullish confirmation the trade will be executed. Trade Safe and use proper risk management on swing trades. because on the long term the movements are more large comparing to intraday trading. so you must use a larger SL with a lot size more smaller than the one you use for scalping. Trade Safe, Joe.
Long
by JoeChampion
6