Johanes

JLS: BoE the Most Professional Target Zone Managers After Fed

Short
FX_IDC:GBPUSD   British Pound / U.S. Dollar
Based on target zones measurement, analysis and performance, the findings is confirmed for the BoE as the most professional target zones managers after The Federal Reserve Bank of New York.

The target zone of the GBPUSD is managed by the Fed and BoE in compliance to the policies, regulations and practices to maintain the price stability in medium term and short term as well as in long term. And the target zones of the NZDUSD, AUDUSD, USDCAD, EURUSD, USDJPY and USDCHF are managed by the Fed and the RBNZ, RBA, BoC, ECB, BoJ and the SNB in compliance to the policies, regulations and practices to maintain the price stability in medium term and short term as well as in long term.

The cross rates or derivative pairs' target zones are by product of major pairs' target zones managed and maintained by the central banks (BoE, ECB, BOJ, SNB, BoC, RBA and RBNZ), excluding Fed. The cross rates or derivative pairs' target zones shall not exceeding the target zones of their major pairs' target zones.

Based on the measurement of all the cross rates or all derivative pairs' target zones, the findings is confirmed for GBP-pegged pairs' target zones managed and maintained by the BoE are matching the target zone of GBPUSD and her counter parties' target zones (NZDUSD, AUDUSD, USDCAD, EURUSD, USDJPY and USDCHF), whereby the GBPNZD, GBPAUD, GBPCAD, GBPJPY, GBPCHF and EURGBP are by products of GBPUSD and the NZDUSD, AUDUSD, USDCAD, EURUSD, USDJPY and USDCHF.

The other cross rates or derivative pairs' target zones are found to be misalignment on the ceilings of their target zones. These misalignments are the causes of risk on the stop loss management. The misalignment not seen on GBPUSD and GBP-derivatives pairs' target zones and this result the GBPUSD and GBP-pegged pairs to be the lowest risk to trade on their target zones.

Similar to all major and derivative pairs' interdays high and interdays low interior their target zones, the misalignment always found and result the interdays high and low trading become at risk. This is due to the fact that no policies and regulations enforced on interdays high and low and their prices are the result of trading activity by all global traders interior the target zones. At such, any stop loss placed interior the target zones are subject to risk.

The only policies, regulations and practices enforced is for "target zones". Any mistake or error made on the measurement of the target zones result the risk to trade the target zones, and consequently result the high risk on their interdays high and low. Therefore, the measurement of the target zones and their lower and upper ceilings become the most important to valuate their directional price trends interior their target zones, and the interdays high and low trading shall match the directional price trends of the measured target zones. And, the risk of misaligment still exist to anticipate on the target zones as well as the interdays high and low. Less misalignment or minor misalignment on major pairs is the result of the Fed's price stability management, but minor disputes also found with IMF/BIS and the US Treasury.

The Bank of England (BoE) is the first practitioners of target zones and currency band after the inception of the theories into policy by the OECD and IMF/BIS, and they continue to lead the market after the Fed.

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