Guess who is knocking heavens door? Its the banks! They are starting to move jobs out of the UK: http://news.sky.com/story/brexit-banks-begin-moving-jobs-outside-uk-recruiters-warn-10595375
In the beginning of August 2016, I shorted the pound for fundamental reason and the technicals aligned with it. And now we are back to the levels where we started again. And, then after that, the UK data started to show positive waves of news and NOTHING made sense. I could not even predict anything. It was all haywire, and I lost several trades in GBP until mid-September:
I am looking for history to repeat itself again with all the positive short-term news in the UK data suddenly coming out negative. Here is what I am looking for:
September 28 (Wednesday) in the morning: MPC Member Shafik Speaks. we need to really listen to what he has to say. This is NOT a normal trade. The trade can rise higher. I need to see some divergence at 1.3070. This price looks tastier than 1.2995, where I have another order to short, should price fall there.
Friday (UK's Currency Account) - analysts project that it will be worse than last month. Ok, so the cards look good in our favor so far. We only need one more element. We need USD to turn from being a short-term mixed thought to dollar positive: Core Durables and it that is bad, then Yellen to say something when she herself is "YELLened" at by the government. Crude Oil Inventories come out at the same time. We need that and for the deal the oil circus over in the middle eat to break down so that oil will fall. We will know tomorrow. we have the orders in GBPUSD , but not triggered yet.
Long-term, I am the pound, there is no reason to buy it.
Waiting to short at 1.2995 or at 1.3070 with DIVERGENCE!!
Stops at 1. 3121
Target: 1.25, 1.26 and 1.2790ish
Now, 6 minutes to the US data release.
Other things to watch:
- UK Capital Outflows, Direct Foreign Investment and business investment
- Trade Statistics
Why? Because if you are an investor, it only makes sense to do this if you want to invest in a country or economy, right?
Read above to find out.
I will also add now that at 3:35pm (New York time) FOMC Member Mester Speaks and at 6:15pm FOMC Member George Speaks. I will not be watching or listening.
Tomorrow, US GDP and Unemployment Claims comes out; this is hot news. Bullish or bearish US GDP? Well, I am bullish the USD in the long-term and hope the US data coming out tomorrow will support the central bank's direction.
So, I just wait and turn off the charts again until midnight (New York time) or London open.
If GBPUSD falls down sharply now, then you can hear the cries of ignorant traders who ONLY look at technical analysis saying: "You see, the GDP was good but it went down." Now, you have been infor,ed.
there is other stuff involved... going to sleep....
If the UK loses "ACCESS" to the Eurozone.. they lose big time.
....also where are their investors?
foreign investors..I don't see them piling in!
"Business daily Dagens Næringsliv reported that the UK's international trade secretary, Liam Fox, lobbied his Norwegian counterpart, Minister of Trade and Industry Monica Mæland, for Norway to join the United Kingdom in establishing a task force to prepare a new trade agreement for when the Brits formally leave the EU.
But when Fox's request was relayed to the Norwegian Foreign Ministry, it was rejected. According to Dagens Næringsliv, the ministry's director general for European affairs, Niels Engelschiøn, thought that joining the UK in a special task force would jeopardize Norway's European Economic Area (EEA) agreement. "
I took a small short. Same target. I am going to see the president of the World Bank today. I'll do my best to ask him about the UK and the pound.
"04:10 BoE Governor Carney reiterates that the BoE's actions have prevented the situation in regards to Brexit becoming worse, adding that they are willing to tolerate some inflation overshoot to accommodate economic strength"
Bank ofEngland Credit Check so far doesn't look good as I read it, but taking Carney at his word today, t is hard to remain short, unless for the cause of a stronger dollar. "http://www.bankofengland.co.uk/publications/Documents/other/monetary/ccs/2016/16q3.pdf
Thus, this surprising catalst causes me to reduce HALF of my position, as things are not lining up in my favor and causing confusion to the situation.
Interesting news: "S&P's warning that the GBP could lose its reserve status" :
Another Summary here:
OLD BUT *vERY iMPORTANT TO read: http://www.telegraph.co.uk/business/2016/05/25/sterling-could-lose-position-as-elite-reserve-currency-if-uk-vot/
FINALLY: FORIEGN DIRECT INVESTMENT <-- This is what I've been dying to hear!
Lack of Foriegn Direct Investment slightly confirmed. Many probably will not understand this statement. hehe That is good for me: "Mr Ravi said Britain has limited scope for a spree on infrastructure projects and is walking a fine line on budget policy. "Before Brexit, the trajectory was planned fiscal consolidation, but we're no longer certain we're going to see that," (Ravi Bhatia is the S&P director of sovereign ratings in Britain).
RUMOR HAS IT that MANY US banks areabout to pull out of the UK:
- France says US banks plan to leave Brexit Britain: "French finance minister Michel Sapin says US banks have told him they will move operations out of Britain as it presses ahead with Brexit" https://www.theguardian.com/business/live/2016/oct/14/france-says-us-banks-plan-to-leave-brexit-britain-business-live
Conclusion: Carney is fishing and vying for investors until the UK's fate is sealed. UK looks like it will crumble first. If banks are going to pull out of the UK, then why buy their currency?
(1) The UK has not pushed the Article 50 button and the that are still waiting to start EU negotiations next month. The Article 50 button to be pushed in March.
(2) The European Union is the UK's top trading partner.
(30 It will possibly lose "its reserve currency status if it fails to secure full access to the European single market."
...connect the dots....
this news got me thinking - if the big boys are closing shop , it must mean they know something that we small time retail players do not . what's your take ?
I do not know or have any predictions for the economic data tomorrow or speeches like usual:
I will have my squawk on...all night for any sign that Shafik (UK guy) become bullish on the UK.
He speaks in a few hours and if he wants to play games, I have that 32 pip stop. Then, I am going to short him at 1.3070 if it can rise that high. Then, Fed Chair Yellen Testifies a few hours afterwards.
Crude Oil Inventories... I don't know what to expect, but I will be hoping that the deal in the Midde East will be broken down. They keep making deals and agreements that falter. So, I will be listening on the squawk tomorrow regarding that. I won't be looking at the charts though just listening in on the news.
You see? A NAKED PRICE ACTION CHART of EUR/GBP tells you nothing about what us REALLY happening to the Euro or the GBP. It is just a ratio showing you which one is going up or down faster. They are both WEAK currencies. A terrible pair to trade; because they can take turns going up and down. If one were weak and the other were strong, then this would be a different story; it would be easier to trade.
This is why the naked price action hypothesis is dumb to trade on currency pairs. We are not PAR traders, but "currency" traders after all, but all the gurus want you to believe that a chart is a chart, when in forex it doesn't tell you much of anything of what is really happening. You are looking at 1/28 of the market for EURO and 1/28 of the market for GBP when you look at EUR/GBP. So, we are missing the BIG picture here. Selling their ridiculous forex courses to us...grrrrrrr. And it doesn't help us really know what is happening in reality.