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GBP CHF BUY (POUND STERLING - SWISS FRANC)GBP - FUNDAMENTAL BIAS: BULLISH 1. Virus Situation The UK’s vaccination success has been a key driver of positive sentiment for GBP from the start of 2021 and has meant the county is on the verge of completely removing covid restrictions. One short-term negative is recent concerns about the Delta variant which has seen a 4-week delay in the planned reopening originally scheduled for June 21. This doesn’t change the fundamental bullish outlook and should be soon forgotten if the UK moves ahead with it’s new reopening from the middle of July. 2. The Monetary Policy outlook for the BOE Markets were expecting a hawkish tilt from the BOE at their June meeting with Gilt yields, SONIA futures and Sterling pushing higher into the meeting. The bank took a more balanced view by sticking to a transitory inflation outlook and also slightly tempering the more aggressive rate path expectations going into the meeting. As a result, GBP, Yields and SONIA futures unwound their pre-meeting upside, The short-lived downside has played out and that means focus for Sterling should be back on the med-term outlook, where the BoE is still expected as the next in line to tilt more hawkish, and participants will look towards the August meeting which includes the next MPR. 3. The country’s economic developments Hopes of a faster economic reopening and recovery has seen both the BOE and IMF upgrade growth projections for the UK economy which has widened the growth differentials between other majors by quite a bit and is something that should continue to be a supportive factor for GBP as long as the data continues to show better-than-expected prints. Something that we should be mindful of here is that a lot of the positives that has driven Sterling higher in 2021 is arguably already reflected in the price. Thus, if we start to see some disappointing data, as we have more recently, that could start to weigh on some of the aggressive normalization expectations. 4. Political Developments Remember Brexit? Yeah, me neither, but it came back into focus in the form of the recent punchy rhetoric between the UK and EU regarding the Northern Ireland Protocol which sparked some concerns about possible sanctions on the UK. Even though issues like chilled meats have made progress, the protocol and Brexit itself is about much more than sausages. The latest issue has been that of the divorce bill, which the UK says is between 35 and 39 billion while EU counterparts says it’s over 40 billion Pounds. For now these challenges won’t change the med-term outlook for Sterling unless it leads to actual trader sanctions or tariffs, which right now seems unlikely. CHF - FUNDAMENTAL BIAS: BEARISH 1. Developments surrounding the global risk outlook. As a safe-haven currency, the market's risk outlook is the primary driver for the CHF. Swiss economic data rarely proves market moving; and although SNB intervention can have a substantial impact on CHF, its impact tends to be relatively short-lived. Additionally, the SNB are unlikely to adjust policy anytime soon, given their overall bearish tone and a preference for being behind the ECB in terms of policy decisions. The market's overall risk tone is improving with coronavirus vaccines being rolled out as well as the unprecedented amount of monetary policy accommodation and fiscal support from governments. Of course, risks remain as many countries are now battling third waves of the virus. As such, there is still a degree of uncertainty and risks to the overall risk outlook which could prove supportive for the CHF should negative factors for the global economy develop; however, on balance the overall risk outlook is continuing to improve and barring any major meltdowns in risk assets the bias for the CHF remains bearish. Despite the negative drivers, the CHF has remained surprisingly strong over the past couple of weeks. This divergence from the fundamental outlook doesn’t make much sense, but the CHF often has a mind of its own and can often move in opposite directions from what short-term sentiment or its fundamental outlook suggests, thus be careful when trading the CHF and always keep the possibility of SNB intervention in mind.
by thunderpips
3
GBP JPY BUY(POUND STERLING - JAPANESE YEN)GBP - FUNDAMENTAL BIAS: BULLISH 1. Virus Situation The UK’s vaccination success has been a key driver of positive sentiment for GBP from the start of 2021 and has meant the county is on the verge of completely removing covid restrictions. One short-term negative is recent concerns about the Delta variant which has seen a 4-week delay in the planned reopening originally scheduled for June 21. This doesn’t change the fundamental bullish outlook but is a short-term negative. 2. The Monetary Policy outlook for the BOE Markets were expecting a very hawkish tilt from the BOE at their June meeting with Gilt yields across the curve pushing higher, and SONIA futures and Sterling pushing higher into the meeting. The bank took a more balanced view by sticking to a transitory inflation outlook and also slightly tempering the more aggressive rate path expectations going into the meeting. The bank is still expected as the next in line to tilt more hawkish, but participants will look towards the August meeting which includes the next MPR for more guidance on that front. 3. The country’s economic developments Hopes of a faster economic reopening and recovery has seen both the BOE and IMF upgrade growth projections for the UK economy which has widened the growth differentials between other majors by quite a bit and is something that should continue to be a supportive factor for GBP as long as the data continues to show better-than-expected prints. Something that we should be mindful of here is that a lot of the positives that has driven Sterling higher in 2021 is arguably already reflected in the price, but as long as the data continues to surprise to the upside the trend should be supportive for the GBP as it should provide further support for policy normalization from the BOE. 4. Political Developments Remember Brexit? Yeah, me neither, but it came back into focus in the form of the recent punchy rhetoric between the UK and EU regarding the Northern Ireland Protocol. The EU reported that they will take a measured response to any further unilateral moves by the UK to delay implementation of the Northern Ireland Protocol. The risk to the current dilemma is that it forces the EU’s hand to retaliate with possible sanctions or tiggering retaliatory measures through the Trade and Cooperation Agreement. Recent reports have suggested that both parties think the odds of reaching a breakthrough is good and has reduced some of the earlier fears about possible escalation in an already strained relationship. JPY - FUNDAMENTAL BIAS: BEARISH 1. Safe-haven status and overall risk outlook As a safe-haven currency, the market's risk outlook is the primary driver of JPY. Economic data rarely proves market moving; and although monetary policy expectations can prove highly market-moving in the short-term, safe-haven flows are typically the more dominant factor, especially in the current. The market's overall risk tone has improved considerably following the pandemic with good news about successful vaccinations, and ongoing monetary and fiscal policy support paved the way for markets to expect a robust global synchronized economic recovery and reflation environment. Of course, there remains many uncertainties and many countries are continuing to fight virus waves but as a whole the outlook has kept on improving over the past couple of months, which would expect safehaven demand to diminish, resulting in a weak bearish fundamental outlook. 2. Low-yielding currency with inverse correlation to US10Y As a low yielding currency, the JPY usually shares an inverse correlation to strong moves in yield differentials as it affects carry trade dynamics. Like most correlations, the strength of the inverse correlation between the JPY and US10Y is not perfect and will ebb and flow dependent on the type of market environment from a risk and cycle point of view. From the start of the year, (as the bias for US10Y started to tilt higher) the inverse correlation has been exceptionally strong over the past couple of weeks and moves in the US10Y continue to dominate JPY price action. As long as the med-term bias for US10Y remains titled higher, that should put additionally downside pressure on the JPY. As US yields have remained pressured following the FOMC, the USDJPY has continued to diverge from the price action in yields, with USDJPY steadily grinding higher while yields have remained pressured. For now, we are keeping a close eye on US10Y as a continued push lower could affect the USDJPY. However, after the FOMC’s recent communication has improved the outlook for the US Dollar we would expect the low yielders like the JPY to remain pressured against the greenback which could see a weaker correlation develop with US10Y.
by thunderpips
2
We remain short EUR/GBP in cash - NomuraIn the UK, the debate is centred on whether the government will decide to go ahead with the 19 July reopening (we expect most of the discussedloosening to materialize, but with some COVID-19 rules to remain for a bit longer) and if and when the BOE will turn more hawkish. Given the rise in the “Delta variant” and the delay in reopening the UK, UK equity outflows in June have weighed on the currency more than we expected. The BOE has also been more cautious than the Fed on rising inflation but, given the UK’s price pressures seen in the survey data, it appears to be just a matter of time before they need to become a bit more accepting of the idea. While we remain EUR optimists, GBP benefits from high exposure to the reopening trade (via equity sector exposure and reflation) and has a central bank that is more likely to tighten policy than the ECB. Thus, we remain short EUR/GBP in cash (target 0.83 by year end) but do note that it is unclear what will happen before the government makes its decision on the roadmap.
by thunderpips
1
GBPUSD: Update! Spotting False Breakout 🇬🇧🇺🇸 If you remember, last week we spotted a structure breakout on GBPUSD. The price broke and closed below a daily key level, and for us, it was a strong bearish clue. However, it turned out that the breakout was false. After a violation of a support, the price was accumulating for quite a while and managed to return back above the broken structure and also violate a falling parallel channel to the upside on 4H. It looks like the market maker is playing with our expectations here. Adjusting my analysis, now I am locally bullish biased and expect a local bullish continuation. ❤️Please, support this idea with a like and comment!❤️
Long
by VasilyTrader
19
GBPUSD - 2021-2022 FX Forecasts from investment Bank BarclaysThe bank remains confident in a UK economic recovery, but expects that monetary policy will be the key influence on Sterling. “We also expect the BoE to move in line with the Fed and slowly signal some monetary policy normalisation.” If, however, the Bank of England lags behind the Fed in terms of adjusting policy, then the Pound to Dollar (GBP/USD) exchange rate is liable to lose ground. Assuming the BoE does respond, GBP/USD is forecast to be little changed with the Euro to Pound (EUR/GBP) exchange rate weakening to 0.82 by the third quarter of 2022.
by thunderpips
GBP: Calm week aheadFundamental bias: Neutral It should be a calm week on the UK front and for sterling next week. The UK-EU trade dispute has calmed and it seems the grace period on chilled meats imports to NI will be extended. The BoE did not bring too much surprise this week and although a little bit more hawkish than expected, still the MPC refrained from pointing at earlier rate hikes. This suggests some stabilisation in sterling ahead and should EUR/USD continue its slow recovery to and above the 1.20 level, it should bring GBP higher with it. On the UK data front, the final 1Q UK GDP reading (Wednesday) should not bring any surprise, while June housing prices data and may mortgage approvals (both on Tuesday) won’t affect sterling at all. As long as the dollar continues reversing some of its last week’s losses, it should be enough to push GBP/USD mildly higher.
by thunderpips
GBP: Near term balance of risks points to weaker sterlingFundamental bias: Mildly bearish The next few weeks could be a vulnerable period for cable. First, the near-term EUR/USD upside potential has faded and short-term downside risks remain following the hawkish June FOMC meeting. Second, concerns about the spreading Delta variant should prevent any further hawkish repricing of the market outlook for the Bank of England. Third, the political risk factor is back, with growing signs that the UK government may want to unilaterally extend a grace period for processed meat exports to Northern Ireland that expires at the end of June. This would risk a tariff response from the EU. It is a busy week on the domestic data front. We don’t expect much surprise from the BoE meeting (Thursday) and the Bank is unlikely to say anything new after signalling it would not speculate on the timing of a first interest rate move. Also note that no new forecasts will be present in the June BoE meeting. As for the June PMIs (Wednesday), we may see a slight increase in the services index again, though the manufacturing PMIs may reverse lower modestly after the meaningful rise last month.
by thunderpips
GBPUSD : Correction about to Finish & Bull rally continuesSo... on GBPUSD on this Timeframe we are looking @ the following . 5 wave Impulse to the upside completed as indicated in our Blue degree. Correction which is a combination structure about to Complete @1.40500 to 1.41000 We have a WXY correction in our Orange Degree which also has another WXY smaller degree in our Y wave. The correction is gonna end @1.40500 to 1.41000 where we have FIB level 100% to 1.236 of WX of our smaller degree in Black. Also is @ a FIB zone or Level @1.618 of the wave W&X of the Higher degree in Orange. Lastly @1.40500 to 1.41000 is a FIB level 50% of the 5 wave Impulse from 1.38117 to 1.42114, so this is where we will be buying GBPUSD again. PLEASE follow your own RISK MANAGMENT and TRADE RESPONSIBLY.....
Long
by Theofylrx
GBPUSD 1.41128 + 0.01 % LONG IDEA * PRICE ACTION & STRUCTURE HELLO EVERYONE HOPE EVERYONE IS DOING GOOD HAVING A GOOD ONE, READY FOR THE MARKET THIS WEEK, HERE'S A LOOK AT THE POUND / U.S DOLLAR FROM THE 4 HOURLY CHART. The pair is still ranging within structure , looking for a continuation of this moves but should we see a break below of the structure that would signals continuation should confirmations signal that other wise capitalizing on the range on this one. IF THIS IDEA ASSISTS IN ANY OR IF YOU LIKE THIS ONE SMASH THAT LIKE BUTTON & LEAVE A COMMENT. ALWAYS APPRECIATED ____________________________________________________________________________________________________________________ * Kindly follow your entry rules on entries & stops. |* Some of The idea's may be predictive yet are not financial advice or signals. | *Trading plans can change at anytime reactive to the market. | * Many stars must align with the plan before executing the trade, kindly follow your rules & RISK MANAGEMENT. _____________________________________________________________________________________________________________________ | * ENTRY & SL -KINDLY FOLLOW YOUR RULES | * RISK-MANAGEMENT | *PERIOD - INTRA-DAY TRADE
Long
by PULEMokhothu
JPY - FUNDAMENTAL DRIVERSFundamental bias: Bearish 1. Safe-haven status and overall risk outlook As a safe-haven currency, the market's risk outlook is the primary driver of JPY. Economic data rarely proves market moving; and although monetary policy expectations can prove highly market-moving in the short-term, safe-haven flows are typically the more dominant factor, especially in the current. The market's overall risk tone has improved considerably following the pandemic with good news about successful vaccinations, and ongoing monetary and fiscal policy support paved the way for markets to expect a robust global synchronized economic recovery and reflation environment. Of course, there remains many uncertainties and many countries are continuing to fight virus waves but as a whole the outlook has kept on improving over the past couple of months, which would expect safehaven demand to diminish, resulting in a weak bearish fundamental outlook. 2. Low-yielding currency with inverse correlation to US10Y As a low yielding currency, the JPY usually shares an inverse correlation to strong moves in yield differentials as it affects carry trade dynamics. Like most correlations, the strength of the inverse correlation between the JPY and US10Y is not perfect and will ebb and flow dependent on the type of market environment from a risk and cycle point of view. From the start of the year, (as the bias for US10Y started to tilt higher) the inverse correlation has been exceptionally strong over the past couple of weeks and moves in the US10Y continue to dominate JPY price action. As long as the med-term bias for US10Y remains titled higher, that should put additionally downside pressure on the JPY. As US yields broke below 1.5% last week, we have started to see an interesting divergence between that of the USDJPY and US10Y, with yields pushing lower but the USDJPY remaining rangebound and supported above key med-term supported. For now, the correlation remains intact, but if we see a continued divergence between the two assets that is something we’ll need to keep on the radar.
by thunderpips
4
GBP - FUNDAMENTAL DRIVERSFundamental bias: Bullish 1. Virus Situation The UK’s vaccination success has been a key driver of positive sentiment for GBP from the start of 2021 and has meant the county is on the verge of completely removing covid restrictions. One short-term negative is recent concerns about the Delta variant which could see a 2-4 week delay in the planned reopening scheduled for June 21. This doesn’t change the fundamental bullish outlook, but it is a short-term negative that could weigh on Sterling. 2. The Monetary Policy outlook for the BOE Recent positive reactions from market participants to hawkish comments from the likes of Haldane and Vlieghe has shown the market’s predisposition for expecting the BOE to be the next major central bank to move away from ultra-easy policy. As long as the economic data shows that the recovery in underway, the market should continue to expect faster policy normalization in the months ahead and should be a positive input for Sterling. 3. The country’s economic developments The hopes of a possible faster economic reopening and subsequent recovery has seen both the BOE and IMF upgrade growth projections for the UK economy which has widened the growth differentials between other majors by quite a bit and is something that should continue to be a supportive factor for GBP as long as the data continues to show better-than-expected prints. Something that we should be mindful of here is that a lot of the positives that has driven Sterling higher in 2021 is arguably already be reflected in the price, but as long as the data continues to surprise to the upside the trend should be supportive for the GBP as it should provide further support for policy normalization from the BOE. 4. Political Developments Remember Brexit? Yeah, me neither, but it came back into focus in the form of the recent punchy rhetoric between the UK and EU regarding the Northern Ireland Protocol. The EU reported that they will take a measured response to any further unilateral moves by the UK to delay implementation of the Northern Ireland Protocol. The risk to the current dilemma is that it forces the EU’s hand to retaliate with possible sanctions or tiggering retaliatory measures through the Trade and Cooperation Agreement. For now, markets are not too concerned about this as this is seen as the usual political posturing with the grace period for the Protocol is set to expire this month, but it could continue to weigh on short-term sentiment if we see more punchy rhetoric or significant retaliatory threats. As a result of the possible delayed reopening, as well as current positives reflected in recent price action, as well as the political concerns, we have adjusted our STRONG BULLISH bias for Sterling to BULLISH.
by thunderpips
1