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BOE

"Doves" it even matter?A "dovish" surprise from the Fed yesterday ...but does it really matter? Well the removal of 2019 hikes is worth highlighting because it does not fully support the story we are being told from macro data meaning the bar is set high for any further hikes.History tells us it’s very unusual for the Fed to pause for a long time in hiking cycles before resuming meaning this is likely the end of hikes in the cycle. In Brexitland, PM May playing politics with a " Queens Gambit "…by asking for the short-extension till the end of June she is trying to force MPs hands to vote for her deal. Options from the EU are still either for (short) Mid-May or (long) lasting into 2020. The risk scenario which will send Pound flying down across the FX board is that the EU reject an extension. Expecting a muted BOE today, no hikes with the MPC judging further tightening warranted over the forecast horizon... same old story till we clear the political mess. For those who are positioned from the previous ideas in GBPUSD, GBPJPY, GBPNZD and EURGBP it's time to trail stops and sit tight, markets are pricing a higher risk of a no deal Brexit again. Same targets for the drama, for those following I will be covering the BOE live in RTP ... good luck guys.
Short
by ridethepig
GBPUSD Imminent RallyZoom in this chart to notice PA on a lower TL. The GBP is an undervalued currency since the Brexit vote 2yrs ago , this decline means it holds a notional bullish sentiment. The BoE has maintained a hawkish stance amidst the geopolitical hurricane subsequently favouring a strong pound. We choose to look for rallies based on this fundamental bias. The charts too suggest that the long decline is running out of steam till later. Looking left of the weekly chart (use this one) you will notice that Elliot wave 5 is complete and we are now in the corrective (ABC) zigzag phase till fib approx.161.80% to 261.80%, other analysists might see a triangular formation on the daily chart. For what you know, we even might have already begun wave 1 of the next impulse wave. Watch the space!! Buying Levels; Watch out for stop hunt spikes at 1.29900 or at the all time Mother of support 1.29000 Keep the Stop tight around 20 pips. TP as mentioned, Use fib levels, daily pivots and top of the channel. TP1 = 1.30480 TP2 = 1.32000 TP3 = 1.3700 (Extreme), DAIM! you need bags of patience for this! Happy trading folks :)
Long
by SleekPips
1
No deal on the Table: GBP become space dust moving lower (10%) FX:GBPNZD Technicals 1. Unable to break above 50-EMA 'Monthly Chart' 2. Not on this chart, however, GBPNZD rejected 61.8% Fibonacci Fundamental 1. Kiwi dollar has been weak over the last 2-weeks, post-RBNZ dovish 'reality check' 2. GBP requires another 'reality check' too and moving lower (10%) has the capacity to hit the British. All GBP pairs require some urgent repricing to match current capital exodus and lack of investments for the UK economy to recover. Risk Stance A) Willing to risk (400)-pips Reward Stance B) Positioned to take home 1600-pips
Short
by josericaurte.jaen
From Downing Street with LoveHere we go again guys you know what to do....same plays from the loading zone...by now I hope most are locked and loaded in full positions. Unfortunately we have more Brexit politics in play with PM May sending a letter to the EU council asking for an extension this morning. From good sources the EU will accept on the assumption May can get her deal through Parliament by mid-April, otherwise, we are left with a choice between a long extension into 2020 or a no-deal. It is fair to say any extension seems more or less priced in at this point so not expecting much after the knee-jerk on the headline. Expecting the Fed to lower the “dots” signalling one hike in 2019 … a “one and done” approach. June seems unlikely now as the Fed has started to focus on inflation to keep equity markets happy. My base case is for a hike in December meaning the dollar looks underpriced at current levels and with a lingering ECB easing risk premium EURUSD will start the leg lower after we clear Fed and PMIs.
Short
by ridethepig
An update to EURGBP for BOENow is a good time for a quick chart update ahead of the BOE and Brexit countdown. PM May playing politics with a "Queens Gambit"….by asking for the short-extension till the end of June she is trying to force MPs hands to vote for her deal... Options from the EU are still either for (short) Mid-May or (long) lasting into 2020. The risk scenario which will send Pound flying down across the FX board is that the EU reject an extension. We are tracking the same flows towards the top of the range here, and confidence is increasing after the break yesterday. The damage is almost done technically, a rally through current levels will leave us past the point of no return. The first targets cleared and now 0.8841 remains the second target which is in play as early as this week. Well done everyone riding this one from the lows, it's not the time to start adding longs if you are not already positioned. Best of luck!
Long
by ridethepig
11
EURGBP Flash Crash Coming Soon..The previous idea "Strengthening the immune system" received a lot of traction and it is time for a quick update here ahead of the vote in HoC today. Volatility remains very high in the cross, and after the sharp drop overnight the ladder has been cleared for a move back through resistance at 0.8670. Watching this very closely and we have the potential for a huge move to the longer-term key area of interest with a Hard Brexit which remains in the region of 0.97 - 1.00. Good luck.
Long
by ridethepig
1
GBPJPY same plan as beforeHere we are tracking a very similar move to before (see attached: "GBPJPY Shorts on Hourly Chart") on the hourly as bulls become exhausted and unwind their positions for the triple whammy votes this week. Brexit continues as the driver of Sterling for now, on the UK side we have more votes coming next week so eyeballing a test of the lows beforehand. For those following the updates on Japan you will know we have fiscal year end repatriation flows in play there so we have all the ingredients for a fast leg. Best of luck those positioned on the sell side.
Short
by ridethepig
2
Traditional Morning Cable UpdateAs expected… PM May defeated on her Brexit deal. Although a smaller margin than the first time, with highlights coming from David Davis switching sides and a softer Jacob Rees-Mogg. Round 2 is in play for the House of Commons tonight. The house are voting on whether it supports leaving the EU without a deal. Markets are overwhelmingly expecting this to be rejected, leaving the possibility of a Brexit extension (round 3) tomorrow the most likely scenario. I must stress that a one Quarter delay to Brexit should not be viewed as anything other than kicking the can further down the road and postponing the inevitable economic pain that is coming. The extension will offer a third attempt of getting May’s deal through…unbelievable right?… but it is what it is. The pressure on brexiteers to deliver Brexit is mounting and my base case is for the deal to eventually pass meaning the UK will leave the EU with a Hard Brexit and the Pound will have to devalue to offset the immediate loss of access to the global trade stage. Here I am remaining short and continuing to load any soft rallies above the 1.32 handle. We are unlocking the floor after this week, best of luck those who are already positioned and those who are loading! Thanks again for all the support!
Short
by ridethepig
Very clear path for GBPJPY We have a very similar setup to that in GBPNZD (see attached: "Expanding Diagonal in GBPNZD" for more information on the technical side as we will not be covering that here). As expected the House of Commons rejecting the idea of a no-deal Brexit yesterday (although by default unless there are any changes we are heading for this outcome so it still remains in play). From the fundamental side, nothing has changed. As per today the UK is still set to lose market access with the block, meaning no withdrawal agreement and no transition period. This will push inflation through the roof, drowning consumers, meaning household spending will remain weak throughout the forecast horizon. Weak wage growth and less credit capacity do not leave the UK in a comfortable position regardless of how the media is trying to sell this story. In any event, the third and final chapter of the Brexit votes is commencing today. For this one we are tracking whether the HoC can agree on asking for an extension of Art. 50. From very good Westminister sources I can confirm PM May is seeking a two-month extension, however, even if the vote passes the EU are not optimistic with elections around the corner and are unlikely to play ball. On the Japanese side, the fiscal-year-end repatriation flows to JPY have begun. This is a seasonality flow occurring mid-late March every year as Japanese companies repatriate foreign assets ahead of March earnings. Best of luck!
Short
by ridethepig
House of Commons Round 2Round 2 is in play for the House of Commons tonight. The house are voting on whether it supports leaving the EU without a deal. Markets are overwhelmingly expecting this to be rejected, leaving the possibility of a Brexit extension (round 3) tomorrow the most likely scenario. Expecting a soft rally on the thought of no-deal being removed. A nice pipe-dream and worth selling with stops above yesterday's high in my opinion. Lets see how this one plays out. I leave some more pending sells above 1.32.
Short
by ridethepig
13
Dissecting the entire move in Cable (live)We have some time ahead of "House of Commons: Chapter 2" later today so it is a perfect opportunity to start dissecting the moves in cable that have been traded live in Tradingview. Our first position on the sell-side came in at 1.329 (see attached idea "Selling cable with incoming dollar strength") as we were expecting the highs to be set as markets finished pricing in the expectation of at least a one-quarter 'delay' of Art 50. This '((iii))' leg finished after an inline/soft NFP with 20k jobs killing the flows. After another soft rally before the "meaningful" vote yesterday we re-engaged selling at the 1.326 level (see attached "An update to cable ahead of the vote"). Those who are paying attention to the 1.311 target managed to book some profits, I know a few from the Forex chat did, which gave us the '((v))' part in our sequence. Finally we are arriving for the 2nd leg in the 5 wave sequence, we are outguessing that the highs of "iv" will not be taken and looking to swing the enter positions initially towards the 1.28/1.29 area with targets beyond that at 1.24 and 1.21. Lets see how it goes, feel free to open up the comments below if there are any queries.
Short
by ridethepig
7
Birds Eye View of GBPCADHere we are sitting at the top of the channel after the huge miss in CAD data. This move will be from the Pound side, as Brexit becomes ever closer and thus the pain to the UK economy. The soft data in Canada is showing no signs of reversing however I am retaining the bullish CAD view as the underpricing of a hawkish BoC. Capacity constraints and labour market tightness will lead to further hikes. Good news from the US-China trade front will help this pair too via Oil and risk sentiment stabilising. Best of luck guys...Please remember to like and comment to open the discussion.
Short
by ridethepig
2
GBPJPY Shorts on Hourly ChartHere we are zooming in for those wanting to track the initial move in this large leg on a small time-frame. Those who follow the account here will know we recently uploaded a Daily chart on GBPJPY with shorts all the way to the bottom of the range. Here we are showcasing an initial impulse move down at resistance. For a more detailed breakdown on the macro and fundamentals please see our related ideas where Brexit has been explained in depth. Best of luck and feel free to open up the discussion here
Short
by ridethepig
4
The European Union and Great Britain are looking over the cliffsIn Europe the situation is dire. The European Central Bank is giving us more and more dovish signals. Benoit Coeure and Francois Villeroy de Galhau governing members of the ECB have both stated that the slowdown in the European Union is significant and that the interest rate may need to be altered. This week members of the ECB, BoE, FOMC, BoC and RBA are giving speeches. We look forward to their guidance and a spike in volatility for their respective currencies. Prime Minister Theresa May is having a hard time convincing politicians at home. She has turned to the EU for support on her wishes in the Brexit agreement because her Ministers at home are non-compliant. The pound gapped up on Monday and then closed the gap by 10 am +3 GMT. It is once again trading above the 200-EMA on the 1hr timeframe. We remain bearish on the Pound but do not recommend entering a swing trade while price remains above the 200-EMA on the 1hr timeframe. A scalp trade is possible from above the EMA to the Fibonacci level of 38.2% at the price of 1.28685.
Short
by YaroslavBirchenko
The Pound set to continue its declineThe dollar continues its advance. Investors see a global slowdown but figure the US economy to be the biggest and strongest so they put their bets on it coming out ahead. Trump has signed a shutdown avoidance agreement but is now pushing for a national emergency in order to siphon funds from the budget agreed on by congress. Very sticky situation that could lead to a fall in the dollar if the funds are misappropriated. The pound is continuing its decline. We see more turmoil than solutions being propagated in the UK. Prime Minister Theresa May faced hardships yet again from her Parliament when they refused to endorse her return to the EU negotiating table. Who will be in charge of the negotiations remains to be seen but we remain bearish on the whole situation because the deadline is quickly approaching. We look towards the employment data set for the UK on Tuesday to figure out if inflation will stay within the bounds of the mandate the Bank of England. This data is important, it shows us if the BoE might change its monetary policy because of sharp declines in employment or earnings. After all this data is compiled, we will see an inflation report on Thursday. Technical analysis shows us that the pound will likely continue its descent. Two doji candles indicate that despite a good data set from the UK the pound is not ready to climb back to previous highs. The price crossed over the 21 EMA and remains under the 200 EMA. A support level at 1.26734 is a good level to put target take-profits.
Short
by YaroslavBirchenko
BoE Gov Carney speech and the poundIn his speech today BoE Governor Mark Carney said that global growth this year is expected to be at around 3.25%. Since the Brexit referendum, the pound has fallen 25%, causing incomes to fall, and slowdowns all over the economy. Historical stability, solid financial institutions and a well-built social/political system allow the country to maintain afloat. Carney argued for a more inclusive stance from world governments. If services are allowed the same freedom across borders, as goods, then we could have a fundamental shift towards a new economical horizon. If a hard Brexit is to be, we will default to the rules of the World Trade Organization. BoE view of risks on the horizon 1. Complacency. If expansion is prolonged across the world, the following crisis will be much bigger. 2. Possibility of a material slowdown in China. Chinas stability over the last 30 years is magnificent. Post 2008 they have been using two tools - over crediting and shadow banking. A 3% slowdown in China would equal 1% world slowdown and 0.5% slowdown in the UK. 3. Brexit could be the tipping point of the world economy going into a recession. Openness of markets and business prospect are leading drivers of growth. The pound is very much in a down trend. We do not recommend opening long positions in this currency. At the current level the pound is up against the 38.2% Fibonacci level as a resistance level. Yesterday the pound fell right through this level and did not return for a retest. Mark Carney the Governor of the Bank of England did not provide much detail on why yesterday’s numbers were so off. He did use the word “recession” three times. The price could test around 1.3000 again this week, from which it would be wise to open a short position. A stop loss should be placed at 1.30250 which is at the level of the 200-MA. If the trade goes in our favor, the target would be just above 1.26750, the closest support level.
Short
by YaroslavBirchenko
1
Will GBPUSD Actually Tumble To 1.16 Level? Lets Laugh For Now !I bet you really laughed hard on the title and believe me i was laughing too as wrote the analysis. LOL, LMAO or whatever but the power of harmonic patterns can never be underestimated. Harmonic patterns can gauge the direction of the market on a very respectable note. Here we have a POTENTIAL CRAB pattern that might become a reality in the coming months, which inturn would mean the GBPUSD would tumble all the way to 1.16 level! Now thats pretty undervalued currency if that happens! and is bound to reverse if the pattern completes. Potential harmonic patterns are sometimes great as an added confluence factor to where a market might be headed. Currently the GBPUSD pair has been more prone to fundamental factors (BREXIT issues solely) rather than technically driven! Trading any GBP pairs using technical analysis is like carrying a bomb in your pocket which can explode at any moment. Until this BREXIT issues never resolve the GBP will have hard time to be driven technically. The UK might be on the verge of exiting the EU without a deal and everything is heating up and if this happens, expect the GBP to fall as far as it can go. Everything is in balance with BREXIT negotiations and if everything goes wrong the GBP will tumble. Although already undervalued at the moment the GBP will tumble to new levels of all time LOW should BREXIT negotiations go SOUTH. For now lets just laugh but if the GBP hits 1.16 we should get serious and ready to BUY the pair which will yield a very excellent risk to reward ratio.
Long
by FX618Analysis
Perfect Example On How To Utilize Strong FX pair With Weak One !There are many trading strategies out there in the world but it all does not suit us perfectly!. Therefore we end up looking for a new or revised strategy and customize it to our needs. Here i am going to explain one of the best strategy to approach the market when one FX currency has been showing bullishness both fundamentally and technically as well as sentimentally. Currently as i write, we would all wonder everyday what could be the possible strongest FX Currency showing more bullishness at the moment so we can take advantage? Well to answer this question can be hard as the trader needs to keep up and read the fundamental aspects of each FX currencies and decide what FX currency is doing the best. A few weeks ago it was the USD and now in my opinion its the GBP! If you do your reading and technical analysis well you will observe that GBP has some pretty bright future and to add to that the pair (GBPUSD) has been rising for 4 weeks in a row!. Furthermore fundamentally its a currency that is brexit driven and recent news suggests that a deal may be about wrap up by somewhere in October 2018. The GBP has been hit hard by brexit for a long time now, but the currency is largely undervalued by looking at the monthly charts of GBPUSD. Many GBP pairs are showing a lot of signs of bulishness at the moment and are poised for likely gains in the near term. So once you have established the strongest and the currency with a brighter future at the moment we can proceed to the next step. Now ask yourself logically, since i have found the strongest currency pair at the moment what currency should i pair the GBP with? Its a very important question! and as traders we would always like our trade run smoothly with least disturbance as possible and therefore pairing the GBP with the weakest currency seems to be the only logical and technical option here. So coming back to step one, what is the weakest currency pair at the moment? if you read your news and do technical analysis well it might not take you too long to figure it out. For me its the NZD! Why you ask me its the NZD? Well my answer is based on my personal analysis such as looking at the NZDUSD chart its been dropping like rocket for a long time and the fundamentals are the least favorable for this pair. Not only the trade war has hit NZD hard but also their reserve bank failing to give hints on the NZD rate hike. You may look for other currency such as the CAD, but its price is closely linked to OIL market and the volatility can make the CAD go crazy even on short terms. The USD seems to be another currency to think about, recently its showing some weakness but i see it as only temporary. The EUR is strong too at the moment and supported well fundamentally. The safehavens JPY and CHF as said are safehavens and in the event of any market turmoil they become quite volatile and change directions pretty quickly! The AUD is also quite weak at the moment but fundamentals are starting to support this pair. So the last and final crucial step would be to shortlist the most weakest fx currencies and do technical analysis to look for LONG opportunites on higher timeframes! GBPAUD does not indicate any good long term technical opportunity to enter however the GBPNZD has provided some nice set up. Look at the main chart it can be observed that the price was confined in a range for weeks and has now broken out!. I am simply waiting for the price to retrace to 38.2 fib ratio of previous swing before i decide to go LONG on this pair!. The redline represents the target which also happens to be the strong resistance on the monthly charts. The price might likely head to that level which would give us a good risk to reward ratio possibly 1:3. I hope this analysis would be helpful to all as for now and in the future too. Its a really well rounded good strategy pairing the strongest and the weaker pairs together to have a best possible scenario and reward. thank you and follow me if you like my analysis. If there are any signals pertaining to this pair i will post them.
Long
by FX618Analysis
GBPUSD - Trend Resumption; Break-Below of Retracement ChannelI guess I might have posted a little late as the price made its move down while I'm still drawing the chart. Nevertheless, I'm seeing that the major retracement is almost or probably completed for GBPUSD. I've labeled 2 stop loss level, a conservative and an aggressive one, for different risk appetite, and I'm certain of the trend. The main reason for such certainty lies in the dollar last monthly candle formation, and my take is that the dollar is likely to regain domination during September. As for the pound, there's still a lot of weakness coming from the shaky Brexit negotiation and still-weak economic data that's holding back BOE from raising rate any sooner.
Short
by AlgoVenture
Short Term Floor in Cable => As widely expected BOE raised interest rates last week => Here we are expecting Pound to find short-term support from the monetary side for August => Technically we are trading at the bottom of the range with the Hard Brexit train approaching the station. We will see a pullback here into September as FED rate hoke Sept are priced into the Dollar side giving Pound some short-term relief before seeing further weakness into Q4 and beyond. => GBPUSD Long @ 1.300 | TP1 1.33 | TP2 1.345 | SL 1.290 => Good Luck
Short
by ridethepig