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Cable Update (GBPUSD)

  • #589,941
  • Apr 16, 2021 5:13pm Apr 16, 2021 5:13pm
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1.3866 to 1.3778 value area possible... 1.3778 imminent Monday/Tuesday.
Data + Stat + Risk/Emotions Management
  • #589,942
  • Apr 16, 2021 5:22pm Apr 16, 2021 5:22pm
Quoting Georginson
{image}{image}{image}{image}{image}{image} 1.3866 to 1.3778 value area possible... 1.3778 imminent Monday/Tuesday.
Nice charts...
Logic perspective!
Trade to enjoy... Money is after!
  • #589,943
  • Edited 7:17pm Apr 16, 2021 5:36pm | Edited 7:17pm
I think it's going to get bumpy for a while within the range
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Compulsions can be hard to resist
  • #589,944
  • Apr 16, 2021 9:42pm Apr 16, 2021 9:42pm
Quoting Nordling00
I am bullish and i won't take profits until the data. If inflation data comes low, i am thinking about riding this uptrend until next month.
Whats the logic ?
On-site guru & also FF member's' psychiatrist, when not drinking tea
  • #589,945
  • Edited 1:49am Apr 17, 2021 1:37am | Edited 1:49am
the current bullish problem is "can the BoE bear the risk if the bullish target is to the price of 1.426", which will be a burden for the slowing inflation rate.... Moreover, the effect of Covid is still unpredictable ..... and the lock down may be extended ... if President Biden and FED is very clear, it still wants USD weakening and printing money
https://www.bbc.com/news/explainers-52530518
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The Average Discount Everything
  • #589,946
  • Apr 17, 2021 3:50am Apr 17, 2021 3:50am
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yes yes yes
  • #589,947
  • Apr 17, 2021 4:03am Apr 17, 2021 4:03am
Quoting Moty
{image}{image}
It seems we ended the day on a fork.. which way will next week go? My guesstimate is we could see a slight drop to just below 138 say 13780 before looking at 139. The 4h ended on a bit of a wick so can’t tell for sure.
Insane in the Brain..
  • #589,948
  • Apr 17, 2021 4:54am Apr 17, 2021 4:54am
Quoting Bones
{quote} Whats the logic ?
A low inflation rate means the currency will appreciate. Inflation occurs if the money supply is more than production. So, higher the money surplus, higher the inflation and vice versa.

If you are printing 110 $ but producing 100 $ worth of goods and services that means you have %10 money supply surplus and that means you have %10 inflation.
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  • #589,949
  • Apr 17, 2021 5:18am Apr 17, 2021 5:18am
Hi all, I've been following this forum for a week now and thought I'd finally join to say hi - and share my frustrations!
In spite of my volume analysis I was a bit cagey after Thursday's price action and chickened out with a small profit, fearing the .3777 level would hold.
Bit of a mistake! I called it a day after that as I wanted to go out, and what a shock to see the price did not even look back. Oh dear!
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  • #589,950
  • Edited 6:26am Apr 17, 2021 6:13am | Edited 6:26am
Quoting Nordling00
{quote} A low inflation rate means the currency will appreciate. Inflation occurs if the money supply is more than production. So, higher the money surplus, higher the inflation and vice versa. If you are printing 110 $ but producing 100 $ worth of goods and services that means you have %10 money supply surplus and that means you have %10 inflation.
Not always. There is cost push inflation too, which arguably might be the bigger risk with the commodity boom we've seen.

Also consider why inflation hasn't been seen in the States despite the unprecedented rise in the money supply. Probably because the velocity of money is so low and all the money creation is tied up in the commercial banking system.

Inflation expectations are really important too. That whole rise in the dollar and hence the bulk of the down movement in cable over the past weeks was largely the market anticipating future inflation and early Fed tapering. That's an oversimplification of course.
  • #589,951
  • Apr 17, 2021 6:31am Apr 17, 2021 6:31am
Georginson.
Beautifully simple yet logical post. Credit where credit is due.
  • #589,952
  • Apr 17, 2021 6:35am Apr 17, 2021 6:35am
[quote = Moty; 13499398] {image} {image} [/ quote]
If you want a channel, here
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  • #589,953
  • Apr 17, 2021 7:06am Apr 17, 2021 7:06am
Quoting mysterio
{quote} Not always. There is cost push inflation too, which arguably might be the bigger risk with the commodity boom we've seen. Also consider why inflation hasn't been seen in the States despite the unprecedented rise in the money supply. Probably because the velocity of money is so low and all the money creation is tied up in the commercial banking system. Inflation expectations are really important too. That whole rise in the dollar and hence the bulk of the down movement in cable over the past weeks was largely the market anticipating future...
For avoiding (not totally, but substantially) cost-push inflation, you can use GDP Deflator or Core Inflation Rate instead of CPI. So you can see a purer inflation rate.

Well money supply was not a problem until late March. Because like you said velocity was lower compared to the other countries and the amount of money circling around was also lower compared to before, until late March. Now it's starting be an issue for the value of US Dollar and we can see this in GBP/USD, EUR/USD, USD/JPY and others. FED and the government keeps saying that they prioritize full-employment and economic recovery rather than the value of the currency right now. So they will keep this going until 2022.
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  • #589,954
  • Apr 17, 2021 7:48am Apr 17, 2021 7:48am
Hi to all!! GBPUSD Options: during last days RATIO CALL/PUT crossed above 1.....this should be a bullish signal
Have nice weekend
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  • #589,955
  • Edited 9:35am Apr 17, 2021 8:15am | Edited 9:35am
Quoting BeeTogether
{quote} It seems we ended the day on a fork.. which way will next week go? My guesstimate is we could see a slight drop to just below 138 say 13780 before looking at 139. The 4h ended on a bit of a wick so can’t tell for sure.
I'm with you, siding towards the bull side now, up to the supply at 1.39-1.40

We should see some retracement first, there is 1h supply up 1.3850-65, so some pullback expected rather than straight up

We have what looks like basing now and a huge W pattern evident on the 1h chart
  • #589,956
  • Edited 10:51am Apr 17, 2021 10:30am | Edited 10:51am
Quoting Nordling00
{quote} A low inflation rate means the currency will appreciate. Inflation occurs if the money supply is more than production. So, higher the money surplus, higher the inflation and vice versa. If you are printing 110 $ but producing 100 $ worth of goods and services that means you have %10 money supply surplus and that means you have %10 inflation.
Technically I agree thats a true statement
It is not always that way and I can prove it, the main reason is what happens to combat the inflation .
They only way to combat general inflation for sure( without pie in the sky economic multiplier expectations)
is
Higher tax
Higher interest rates ,in a currency pair this can wipe out the actual negative you describe.
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On-site guru & also FF member's' psychiatrist, when not drinking tea
  • #589,957
  • Apr 17, 2021 12:03pm Apr 17, 2021 12:03pm
Quoting Bones
{quote} Technically I agree thats a true statement It is not always that way and I can prove it, the main reason is what happens to combat the inflation . They only way to combat general inflation for sure( without pie in the sky economic multiplier expectations) is Higher tax Higher interest rates ,in a currency pair this can wipe out the actual negative you describe. {image} {image}
Of course inflation is not the only factor that affects the currency. Just like you said even though cpi was up, interest rates were even higher which erased the negative affects of the cpi.

There's three main factors that i look at while trading a currency:

1. Inflation
2. Interest Rates
3. Real GDP

Of course there's more factors such as geopolitical events and commodity prices etc.

And right now, during the pandemic, policymakers don't raise the interest rates. So we have 2 main factors left. Inflation and Real GDP. That's why i am highlighting and mentioning these but not interest rates.

Otherwise yes, i agree with you. Inflation can not be the only actor.
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  • #589,958
  • Edited 1:19pm Apr 17, 2021 12:42pm | Edited 1:19pm
Quoting Nordling00
{quote} Of course inflation is not the only factor that affects the currency. Just like you said even though cpi was up, interest rates were even higher which erased the negative affects of the cpi. There's three main factors that i look at while trading a currency: 1. Inflation 2. Interest Rates 3. Real GDP Of course there's more factors such as geopolitical events and commodity prices etc. And right now, during the pandemic, policymakers don't raise the interest rates. So we have 2 main factors left. Inflation and Real GDP. That's why i am highlighting...
ok,
do you have analysis on those factors ,you are right CB won't raise rates ,
But the cost of borrowing just sharply bounced out of all time lows ,while CB are sitting on their hands
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On-site guru & also FF member's' psychiatrist, when not drinking tea
  • #589,959
  • Apr 17, 2021 1:35pm Apr 17, 2021 1:35pm
Quoting Bones
{quote} ok, do you have analysis on those factors ,you are right CB won't raise rates , But the cost of borrowing just sharply bounced out of all time lows ,while CB are sitting on their hands {image}{image}
That situation with CBOE 10Y Yield chart is nothing special to US. UK 10Y Yield chart is pretty much the same too. So that's why we didn't see any change in FX market.

A country's currency and yield rates are always moving together. Correlation between them are significant.

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  • #589,960
  • Apr 17, 2021 4:15pm Apr 17, 2021 4:15pm
Hello Cable Wait For My Next Update
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