Mysterious sterling strength:
1. Sterling has managed to par losses and actually rise in past days despite a number of heavily weighted factors increasing GBP downside pressure e.g. MPC M. Weale switching to the doves, PMI/ Business Optimism 8yr lows, Sterling rates markets consistently pricing >25bps of cuts to the BOE base rate (details below), the median bank...
Technical analysis - highly bearish:
MA:
1. Just crossed the 2wk and 4wk MA - this is a bearish indication + we have been below the 3m MA for several weeks unsurprisingly since brexit.
IV/ HV:
1. Realised Vols have also unsurprisingly come off, this would but bullish but brexit has distorted the longer dated HV and they are lagging - Implied vols are...
Following today's Service/ Manufacturing PMI miss (worst contraction in 88 months - since 2009) the Sterling market has come under significant pressure as BOE rate cut expectations increase with OIS rates markets pricing a 94% chance of a 4th Aug cut vs 85% before the PMI's were released.
Further, the PMI misses has attracted attention from UK Politicians e.g....
Reuters Analyst Expectations:
FOMC
1. IMPROVING DATA POINT TO SEPTEMBER RATE HIKE -
- The Fed is very unlikely to spring any surprises at the upcoming FOMC meeting, which concludes next Wednesday 27th July, but a September rate hike is a distinct possibility. The statement next week should acknowledge the apparent pick-up in second-quarter GDP growth,...
IMO Mark Carney was very dovish on the margin, certainly reinforcing their/ my view of an August cut being 90% on the table. The most supportive statements were "MonPol Important In Cushioning Effects Of Any Relapse In Recovery In Months & Quarters Ahead", "The MPC Does Not Have The ''Luxury '' and "More Should Be Done To Cushion The Effects Of Negative Shocks" -...
As expected BOE stood pat on their rate decision reiterating much of which was said last week by Gov M. Carney, the need for more analysis to be done is/ was key - " "Detailed Analysis" of All Policy Options Required" and "Extent Of Additional Stimulus Will Depend on August Forecasts".
IMO the notes were very bearish and almost but 100% chance of some sort of...
1. *Id say a 6/10 dovish reaction by markets, GBP falling across the board & FTSE gaining. Carney seems contempt with a lower GBP and is happy to continue talking the currency lower in an attempt to use the exchange rate mechanism as a leading instrument to buoy UK economic stability (GDP, CPI, Unemp) against the potential Brexit backdrop; thus I continue my view...
Now that the Brexit risk has been realised the mentioned pairs above will share some correlation this week as the market changes between risk-on and risk-off as MANY on the events continually drive the sentiment shifts.
My Plan & Expectations
USDJPY
1. My conviction for UJ is long 8/10.
-UJ traded to lows of 98.9 in the midst of the brexit hype, as the...
In the previous post we have used the Price Action data from the Scottish UK Referendum for GBPUSD for the 3-days on and around the vote so the 17th, 18th (vote day) and 19th (result day) of September 2014 as a gauge to forecast whats in store for Price action on Wednesday, Thursday and Friday this week (the parallel days for both of the referendums).
...
UK EU Referendum (Brexit) vs Scottish UK Referendum Price Action Forecast:
- We will use the difference in ATR and volatility between the 3-day run up into UK EU Referendum (UER) and the Scottish UK Referendum (SUR) in order to forecast what we expect price action to show on the 22nd, 23rd and 24th.
2014 SUR 3-DAY EVENT (17,18.19)
1. 1-Period ATR for the...
Thought id put a piece out as my guide for the week for how to trade the 23rd UK EU Referendum vote.
IMO the first rule and most important is - DONT TRADE THE VOTE.
Trying to guess the answer is like trying to win the lottery, so instead i advise taking a position on the volatility , as volatility doesnt discriminate, it trades both ways.
Trading the...
Wanted to post a quick message telling people to sell the rally for 100-200 pips dependant on how quickly you get on the short..
Volatility is trading lower (as we expect in a rally) however it WILL pick up again/ reverse once it bottoms out - which i think is now!
The trend for all GBP pairs is LOWER hence dont fight the trend with longs INSTEAD when you see...
My FX portfolio currently consists of :
- 2Long x USDJPY @ 106.8; 2Short x GBPJPY @ 151.2 (dynamic hedge for long UJ); 2Short x GBPUSD @ 1.4570. I will add to my short GBPUSD holdings if i can get a similar price & I may add to short GBPCHF or EURCHF downside if markets make a turn for the worst as IMO CHF denominations are under-priced relatively (as discussed...
An analysis of which LONG has the best value against the short GBP to play the Brexit. [
- GBPUSD has a target handle of 1.385.
- GBPJPY target handle at 1.483.
- GBPCHF target handle at 1.335 .
- IMO currently i rule out GBPUSD short, as USD doesnt have the same "risk-off" demand as CHF and JPY. Also USD and GBP economies are perhaps the most highly...
This article is a tradable summary of all of the indepth GBP$ analysis i have done recently - I aim to give you a conclusive opinion and trading plan. SEE PART 2 ALSO
I suggest you check out ALL of the relevant articles that i attach to this post so that this post makes sense
In a nutshell i am heavily short GU, about 8-9/10 @1.44/5 (@1.41 only 2/10) -...
I suggest you check out ALL of the relevant articles that i attach to this post so that this post makes sense
SEE PART 1 ALSO
GBPUSD historical Price Action
The findings of previous the attached "Price action history posts" led to the conclusion that referendum history clearly wasn't repeating itself however IMO because this is the case it has opened up...
