We almost reached the point were the panic about Scotland started, so we can say that this unpredicted panic sale was absorbed. Of course, the big sale started at 1.66, but such a big politic event should leave a mark on the price, therefore i entered short at 1.6509 leaving the 100 pips opened and setting the SL above.
I don t think that we will be able to go higher than 1.66 because the aim of the counter trend was to absorb the panic sale. We still have a very sustainable economic growth in the USA.
The Fed meeting: 1) Very important.. this time we have already 2 members that voted against the Fed decision, and in august we had only 1 ( they have better expectation for the economy and they think that FED is to careful = the interest rate should be increased sooner.)
2) next month the QE will be stopped this shows that the economy is going well
Therefore my first target is 1.60 fallowed by 1.57 SL over 1.66
Comments
mrwildebeast
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You are looking very 2 dimensionally at the price action, you ignore the cyclic element ie, the propensity of the market to act to fundamental news, the mood if you like, the move down from 1.71xx does not look like any big event changed the view, rather the cyclic drivers turned down, no matter how you count the waves ther elliot wave theory turned bearish at that point. The lack of volotility earlier in the year was typical of confluence of cycles, then 2 or 3 long term multi year cylces turn down and Woooosh, Fundamentals drive this market but the Amplitude of move is cyclic and no more than an indication of institutional funds being carefully marshaled around months before.
Price action is the summation of investor sentiment and crowd mentality, human nature is what it is, thats why TA works but the simplest explanation ( of price action ) is normally the correct one, any TA that you could not teach a 7 year old is probably not worth a dime unless you are trading pips on a min by min basis
I expect strength now ( as a retracement ( ii ) wave of three then weakness around the new year ( iii ) then a resumption of upward pressure. this will not change until the US does something to address the structural defecit and realize that the dollar years are near an end chiefly because it failed to adress the issue 5 years + ago, certainly interest rates aren't upward bound anytime soon. When the national debt gets to the 20TR level or there abouts we could see 4.xxxx GBPUSD as some creditor nations, firstly smaller oneslike Russia then Mid east and Chinese start to exert pressure and refuse to keep US LLC on life support.
In the Mid term I can't see 1.71xx being surpassed until Q1 2015 unless UK rates rise suprising early ( Which they may now that the Scottish itch has gone away )
Cheers
OLAOLA1
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thx for the the time to write this big and interesting comment.
I try to keep things simple. And try to enter position that are offering me a good risk reward.
I am trying not to see things 2 dimensionally, of course not all the time is the case. I entered short because i see that the markets are willing a stronger dollar , almost in every currency pair the dollar is getting stronger, i dont see why here should not be the case. I agree with you about the dollar, but this is something that would not happen now. If we will break 1.66 i will analyse again my position.
mrwildebeast
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Yes i agree that sentiment is for the USD but there are lots of participants that have a vested interest here, Someone once said that the market can remain irrational longer than you can remain solvent, this is always in my mind, Short term yes another down leg now that the price bounced off the 34 MA this could be an int top and the next downleg could be from here but the $$ day will come and it will be a bad day the dollar is beholden to China / Russia and theres no changing that.
FRom a tradingpoint of view i'm thinking 1.57xx then a resumption of an upward momentum, probably coinciedent with a UK rate rise
Good luck and Cheers
OLAOLA1
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why not? we will see when we will be at 1.57, for the moment lets see where the market will bring us today.
tarrget 1 reached sooner than expected .. now the way to target 2 is open
mrwildebeast
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What timeframe do you have for your target 2, I see year end ish @ 1.57
OLAOLA1
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I think sooner maybe middle oct. till nov. the volatility is to big. We don t need so much time.
OLAOLA1
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be careful if you dint enter short at 1.65 i see that a divergence is forming at 1 h chart so we could see higher prices than this. So if you are thinking about a short now it is to dangerous.
mrwildebeast
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My cyclic indicators tell me that we should expect big weakness around year end but that volotility will stay high on a weekly / monthly basis ie that the longer cycles ( 60 to 150 days ) are relatively strong. I am a believer that many cycles are in the market reflecting many trading motives from speculation to sovereign manipulation, however i also believe that the cycles wax and wane in their importance and effect, right now the 98-103 day cycle is pre-eminent. this is why i still think the bottom to this reaction to the main trend ( long ) is at year end.
Price action is the summation of investor sentiment and crowd mentality, human nature is what it is, thats why TA works but the simplest explanation ( of price action ) is normally the correct one, any TA that you could not teach a 7 year old is probably not worth a dime unless you are trading pips on a min by min basis
I expect strength now ( as a retracement ( ii ) wave of three then weakness around the new year ( iii ) then a resumption of upward pressure. this will not change until the US does something to address the structural defecit and realize that the dollar years are near an end chiefly because it failed to adress the issue 5 years + ago, certainly interest rates aren't upward bound anytime soon. When the national debt gets to the 20TR level or there abouts we could see 4.xxxx GBPUSD as some creditor nations, firstly smaller oneslike Russia then Mid east and Chinese start to exert pressure and refuse to keep US LLC on life support.
In the Mid term I can't see 1.71xx being surpassed until Q1 2015 unless UK rates rise suprising early ( Which they may now that the Scottish itch has gone away )
Cheers