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Cable to recover some more in December

al_dcdemo Posted 24 Nov. as Analysis on GBP/USD, Target: 1.2625, Date: 2nd of January, 12:00 GMT  in #Technical analysis #GBP/USD #Daily Chart #Weekly Chart #Technical Tools #Net Short Positioning #Capitulation Move #Brexit Vote #Neutral Boe
Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
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The declining wedge that the Cable has been carving out during the past two years has been pierced on both sides in one of the most volatile weeks i…
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al_dcdemo 9 Dec.

UPDATE 5: U.S. dollar is poised to close the week higher against the euro, the yen, the franc and the pound. The Canadian dollar is easily the best performer this week, owing to pullback in yield differentials and higher prices of oil. The antipodean dollars will close the week marginally stronger. Risk-on trades woke up after ECB decision but have remained cautious ahead of the FOMC meeting next week. A rate hike of 25 basis points is virtually a done deal. The market will focus on the rate statement, dot plots and economic projections to gauge the tightening path in 2017 and beyond.

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al_dcdemo 17 Dec.

UPDATE 6: The reaction after the Wednesday's FOMC decision was telling. The jump in bond yields and the surge in the U.S. dollar showed that the markets were priced for a more gradual tightening path than implied by the latest dot plot. Yellen's endorsement of the dot plot was another contributing factor. Even though it may seem that the dollar moved too far too fast, the rally looks very strong and I think we haven't seen the top yet. With this kind of momentum it is possible that the usual year-end thin holiday liquidity will mean more volatility rather than range-bound action.

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al_dcdemo 20 Dec.

UPDATE 7: GBP/USD has been grinding ever so slowly higher since the flash crash in early October. The pair has been supported by easing of Brexit rhetoric, better than expected macroeconomic data and, not least, GBP/JPY buying. Cable is currently stalling just below 50 DMA. A convincing break would target November low (1.23) and the post-flash-crash consolidation (1.22). 1.25 is the current bull/bear line in sand. A break and hold above may lead to a retest of 100 DMA.

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al_dcdemo 24 Dec.

UPDATE 8: Liquidity and volatility both fell ahead of the holiday season. U.S. dollar strengthened against the pound and commodity currencies, weakened against the yen, and remained unchanged against the euro and the franc. If the past week was of some example, the week ahead should be even more quiet. But I wouldn't bet on it because I think some of the recent moves have further to run and many will not be patient enough to wait for the New Year to get on board of them. Year-end position-squaring coupled with low liquidity will produce a couple of moves in any event.

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al_dcdemo 31 Dec.

UPDATE 9: The final week of the year was a pretty calm one if we exclude the spikes in euro and franc on Friday - already thin early Asian session liquidity was further diluted due to holidays and a large-sized order took out weaker hands. The U.S. dollar ended the week mostly lower, in part also due to bulls booking profit at year-end. Many countries are observing a holiday on January 2nd but I'm sure not everyone will wait until the 3rd to place their first trade. Market themes remain firmly in place and that could mean a volatile start to the new year.

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Cable to recover after the flash crash

al_dcdemo Posted 27 Oct. as Analysis on GBP/USD, Target: 1.2425, Date: 1st of December, 12:00 GMT  in #Technical analysis #GBP/USD #Daily Chart #Weekly Chart #Technical Tools #Declining Wedge #Net Short Positioning #Brexit #Capitulation Move
Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
The declining wedge that the Cable has been carving out during the past two years has been pierced on both sides in one of the most volatile weeks …
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al_dcdemo 16 Nov.

UPDATE 6: British pound has been withstanding U.S. dollar strength well and is basically flat compared to the beginning of the last week. Weaker inflation figures failed to send the pair lower yesterday. There's more U.K. data coming in today (jobs and wages) and tomorrow (retail sales). 1.25 is the current bull/bear line in sand. 50 DMA is the first resistance level to watch and then the next one in 1.275 - 1.28 band. Some stronger demand could be expected between 1.23 and 1.24.

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al_dcdemo 19 Nov.

UPDATE 7: In the second week after U.S. presidental election, the U.S. dollar rose against all G10 major currencies bar the Canadian dollar, which tends to perform well on the crosses in the strong U.S. dollar environment. The yen was the weakest of the bunch with the antipodean dollars not very far behind. U.S. dollar index blasted through 100 and closed the week on thirteen-year highs. If current market assumptions (big fiscal stimulus, further tightening by the Fed) prove to be correct, this could well have been the start of the second leg of the multi-year U.S. dollar move.

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al_dcdemo 28 Nov.

UPDATE 8: The U.S. dollar appreciated against most of the G10 major currencies in the three weeks after the U.S. election. An exception is the pound which has been completely disconnected from the U.S. dollar trade and remained range-bound. Australian and New Zealand dollars, supported by yield advantage and the former also by rising copper prices, started their corrections a bit earlier. Low-yielders, the euro, the franc and the yen, recouped some of the losses on Friday and earlier today, but the U.S. dollar bulls were quick to buy into the dips. Price action suggests a risk-on week ahead.

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al_dcdemo 29 Nov.

UPDATE 9: Cable broke above 50 DMA and traded up to 1.2530 in the first half of yesterday's Asian session before pulling back below the big figure in the second half. There was no follow-through and the pair was then sold down to 1.2380 by the middle of the day. 1.2350 - 1.24 is the initial support followed by a stronger one near the three-week range bottom at 1.23. 50 DMA, which currently runs just below 1.25, is the first tougher obstacle to overcome on the upside before 1.2525 - 1.2550 and 1.2675 - 1.27 bands.

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al_dcdemo 1 Dec.

UPDATE 10: Start of the new month has seen British pound bulls step up. No particular driver has been cited and the pound rallied despite weaker than expected Manufacturing PMI. That speaks of underlying strength as the pound is bought across the board with GBP/JPY move particularly notable. Cable closed above 50 DMA and 1.25 level yesterday what makes today's move a logical continuation. November high (1.2675) is the immediate resistance but a stronger one may come in closer to July low and 100 DMA, near 1.28. Initial support is expected at 1.26.

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