This could be a stop hunt run for buyers unless it breaks below 38250/38000 accordingly. Just an opinion.
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Fools Rushing 
2
Cable Update (GBPUSD)
- #616,761
- Aug 16, 2021 1:58am Aug 16, 2021 1:58am
- Joined May 2008 | Status: I Loose, I Win, I Conquer | 1,834 Posts
Fools Rushing
- #616,763
- Aug 16, 2021 2:02am Aug 16, 2021 2:02am
- Joined Dec 2017 | Status: Trader | 30,688 Posts
yes yes yes
- #616,765
- Aug 16, 2021 2:06am Aug 16, 2021 2:06am
- Joined Aug 2009 | Status: Trader | 12,448 Posts
If you are new to Forex? Say Goodbye to your account!!
- #616,766
- Aug 16, 2021 2:14am Aug 16, 2021 2:14am
- Joined Dec 2017 | Status: Trader | 30,688 Posts
yes yes yes
- #616,767
- Aug 16, 2021 2:19am Aug 16, 2021 2:19am
- Joined Mar 2021 | Status: Crazy Frog | 3,775 Posts
"Buy Cheap and Sell Expensive , Its Market Anyways where People Get profit"
- #616,769
- Aug 16, 2021 2:24am Aug 16, 2021 2:24am
- Joined Jan 2013 | Status: Trader | 4,386 Posts
Profit-taking on long dollar positions was seen ahead of the weekend. The yield on the December 2022 Eurodollar futures slipped to finish unchanged on the week that saw CPI and PPI reports. The preliminary University of Michigan's consumer confidence measure tumbled to its lowest level since 2011 as the delta variant flares, leading to new social restrictions and delays in the return to work in the US for many.
The market appears to have fully discounted a Fed hike at the end of next year. Although at the June FOMC meeting, two officials thought that two hikes by the end of 2022 would be appropriate, the market, investors seem reluctant to give countenance now. This, coupled with the proximity of key support like $1.1700 in the euro, $0.7300 in the Australian dollar, and $1.3780 in sterling, and the summer doldrums may see a consolidative phase, though, with speculation of a hint of tapering later this year from Jackson Hole, the greenback's downside may be limited. Still, Norway and New Zealand's central banks meet in the coming days and will likely provide a timely reminder that the Federal Reserve is not in the front of the queue.
Before turning our attention to the technical analysis of the currencies, it may be worth going over the math behind our judgment that a 25 bp hike has been fully discounted by the December 2022 fed funds futures, especially given others claim that a rate hike is expected in early 2023. The first thing to note is that the futures contract settles at the average effective fed funds rate for the month, not the target rate or the end of month rate.
With no change in stance, let's assume that the fed funds effective average is unchanged at 10 bp in the first 14 days of December when the FOMC's two-day meeting ends. If it hikes the target rate to 25-50 bp, the neutral assumption is that the effective average fed funds rate will rise by 25 bp. So if it averages 35 bp in the last 17 days of the month, the effective average for the entire month is (14*10) + (17*35)/ 31, or 23.7 bp, which we can round up to 24 bp. The contract finished last week, yielding 27 bp.
Dollar Index: After stalling in the middle of the week at last month's high (~93.20), the Dollar Index sold off ahead of the weekend to new lows for the week near 92.45. It nearly retraced half of this month's gains. The next retracement target is close to 92.30. It seems premature to play for the potential double top pattern. Let's revisit it when the neckline (~91.80) comes into view. The MACD appears to be stalling in the middle of the range, while the Slow Stochastic is still moving higher. The Dollar Index lost about 0.33% last week. It is only the fourth weekly decline since May 21.
Euro: One of the most important technical developments last week was that the $1.1700 level, the year's low set in March, held. That area represents the (38.2%) retracement objective of the rally since March 2020 when the euro visited the $1.0625 area. Below there, support is seen in the $1.1600-$1.1650 area, though the next retracement objective (50%) is slightly below $1.15. The MACD did not confirm last week's low, setting up a potential bullish divergence. The Slow Stochastic did continue to trend lower last week but is stabilizing in oversold territory. The lower Bollinger
Band was frayed as $1.17 was approached, but the short-covering ahead of the weekend lifted it toward the middle of the band (20-day moving average), which comes in near $1.1800. The $1.1830 area corresponds to the (61.8%) retracement target of this month's decline.
Japanese Yen: The rise in US yields helped propel the greenback to a one-month high near JPY110.80 in the middle of last week after a 2.5-month low was recorded in the previous week around JPY108.70. After peaking at midweek, US rates stalled, and the dollar was sold ahead of the weekend. New lows for the week were visited as the dollar was sold through the 20-day moving average (~JPY109.95). The dollar approached (61.8%) retracement near JPY109.50. Its five-day advance fizzled, and a three-day decline is in tow to start the new week. The MACD is gently edging higher, while the Slow Stochastic is pushing into overbought territory.
British Pound: Sterling fell to new two-week lows before the weekend near $1.3790 and just ahead of the 200-day moving average (~$1.3780) but recovered as the session progressed to reach $1.3875. Resistance extends into the $1.3890-$1.3910 area, though last week's high was set a little higher, and the more formidable resistance is the old $1.40 area. The two-week downtrend will begin the new week a little above $1.3900. The momentum indicators are mixed and not particularly helpful here. Still, sterling finished the week a touch lower. Since the end of May, sterling has risen in only three weeks. It was the only major currency besides the Swiss franc to slip against the dollar, and pressure from the cross may have contributed. It fell against the euro for the first time in four weeks and only the fourth time since late April.
Canadian Dollar: Last week, the US dollar barely traded outside the August 6 trading range (~CAD1.2495-CAD1.2580). To further underscore the sideways movement, consider that for the fourth consecutive week, the greenback settled between CAD1.2500 and CAD1.2530. The MACD is trending higher while the Slow Stochastic has turned down. The US dollar flirted with the 200-day moving average (~CAD1.2565) in the first part of last week but posted an outside down day on Tuesday (traded on both sides of Monday's range and then settling below the previous day's low). It found support in the CAD1.2490-CAD1.12500 area. Speculation of an election call with a vote in late September did not seem to move the market. A continuation of the status quo seems to be the most likely scenario.
Australian Dollar: The Australian dollar has held key support around $0.7300 and closed about a 0.20% higher on the week. It was the first back-to-back weekly gains since April. In the middle of the week, it has put in a roughly $0.7325-$0.7390 range and stayed within it during the last two sessions. A move above the month's high near $0.7430 would initially lift the tone and target $0.7500. Here too, the momentum indicators are moving in opposite directions. Speculators in the futures market have been net short the Aussie since early June, and the 50-day moving average broke below the 200-day moving average (dead man's cross) last month. The (38.2%) retracement objective of the Aussie's rally from March 2020 low (~$0.5500) is found near $0.7050, which roughly corresponds to the possible head and shoulder tops measuring objective.
The market appears to have fully discounted a Fed hike at the end of next year. Although at the June FOMC meeting, two officials thought that two hikes by the end of 2022 would be appropriate, the market, investors seem reluctant to give countenance now. This, coupled with the proximity of key support like $1.1700 in the euro, $0.7300 in the Australian dollar, and $1.3780 in sterling, and the summer doldrums may see a consolidative phase, though, with speculation of a hint of tapering later this year from Jackson Hole, the greenback's downside may be limited. Still, Norway and New Zealand's central banks meet in the coming days and will likely provide a timely reminder that the Federal Reserve is not in the front of the queue.
Before turning our attention to the technical analysis of the currencies, it may be worth going over the math behind our judgment that a 25 bp hike has been fully discounted by the December 2022 fed funds futures, especially given others claim that a rate hike is expected in early 2023. The first thing to note is that the futures contract settles at the average effective fed funds rate for the month, not the target rate or the end of month rate.
With no change in stance, let's assume that the fed funds effective average is unchanged at 10 bp in the first 14 days of December when the FOMC's two-day meeting ends. If it hikes the target rate to 25-50 bp, the neutral assumption is that the effective average fed funds rate will rise by 25 bp. So if it averages 35 bp in the last 17 days of the month, the effective average for the entire month is (14*10) + (17*35)/ 31, or 23.7 bp, which we can round up to 24 bp. The contract finished last week, yielding 27 bp.
Dollar Index: After stalling in the middle of the week at last month's high (~93.20), the Dollar Index sold off ahead of the weekend to new lows for the week near 92.45. It nearly retraced half of this month's gains. The next retracement target is close to 92.30. It seems premature to play for the potential double top pattern. Let's revisit it when the neckline (~91.80) comes into view. The MACD appears to be stalling in the middle of the range, while the Slow Stochastic is still moving higher. The Dollar Index lost about 0.33% last week. It is only the fourth weekly decline since May 21.
Euro: One of the most important technical developments last week was that the $1.1700 level, the year's low set in March, held. That area represents the (38.2%) retracement objective of the rally since March 2020 when the euro visited the $1.0625 area. Below there, support is seen in the $1.1600-$1.1650 area, though the next retracement objective (50%) is slightly below $1.15. The MACD did not confirm last week's low, setting up a potential bullish divergence. The Slow Stochastic did continue to trend lower last week but is stabilizing in oversold territory. The lower Bollinger
Band was frayed as $1.17 was approached, but the short-covering ahead of the weekend lifted it toward the middle of the band (20-day moving average), which comes in near $1.1800. The $1.1830 area corresponds to the (61.8%) retracement target of this month's decline.Japanese Yen: The rise in US yields helped propel the greenback to a one-month high near JPY110.80 in the middle of last week after a 2.5-month low was recorded in the previous week around JPY108.70. After peaking at midweek, US rates stalled, and the dollar was sold ahead of the weekend. New lows for the week were visited as the dollar was sold through the 20-day moving average (~JPY109.95). The dollar approached (61.8%) retracement near JPY109.50. Its five-day advance fizzled, and a three-day decline is in tow to start the new week. The MACD is gently edging higher, while the Slow Stochastic is pushing into overbought territory.
British Pound: Sterling fell to new two-week lows before the weekend near $1.3790 and just ahead of the 200-day moving average (~$1.3780) but recovered as the session progressed to reach $1.3875. Resistance extends into the $1.3890-$1.3910 area, though last week's high was set a little higher, and the more formidable resistance is the old $1.40 area. The two-week downtrend will begin the new week a little above $1.3900. The momentum indicators are mixed and not particularly helpful here. Still, sterling finished the week a touch lower. Since the end of May, sterling has risen in only three weeks. It was the only major currency besides the Swiss franc to slip against the dollar, and pressure from the cross may have contributed. It fell against the euro for the first time in four weeks and only the fourth time since late April.
Canadian Dollar: Last week, the US dollar barely traded outside the August 6 trading range (~CAD1.2495-CAD1.2580). To further underscore the sideways movement, consider that for the fourth consecutive week, the greenback settled between CAD1.2500 and CAD1.2530. The MACD is trending higher while the Slow Stochastic has turned down. The US dollar flirted with the 200-day moving average (~CAD1.2565) in the first part of last week but posted an outside down day on Tuesday (traded on both sides of Monday's range and then settling below the previous day's low). It found support in the CAD1.2490-CAD1.12500 area. Speculation of an election call with a vote in late September did not seem to move the market. A continuation of the status quo seems to be the most likely scenario.
Australian Dollar: The Australian dollar has held key support around $0.7300 and closed about a 0.20% higher on the week. It was the first back-to-back weekly gains since April. In the middle of the week, it has put in a roughly $0.7325-$0.7390 range and stayed within it during the last two sessions. A move above the month's high near $0.7430 would initially lift the tone and target $0.7500. Here too, the momentum indicators are moving in opposite directions. Speculators in the futures market have been net short the Aussie since early June, and the 50-day moving average broke below the 200-day moving average (dead man's cross) last month. The (38.2%) retracement objective of the Aussie's rally from March 2020 low (~$0.5500) is found near $0.7050, which roughly corresponds to the possible head and shoulder tops measuring objective.
MA provides the market's current direction and strength.
- #616,770
- Aug 16, 2021 2:28am Aug 16, 2021 2:28am
- Joined Dec 2017 | Status: Trader | 30,688 Posts
yes yes yes
- #616,772
- Aug 16, 2021 2:42am Aug 16, 2021 2:42am
- Joined Mar 2021 | Status: Crazy Frog | 3,775 Posts
"Buy Cheap and Sell Expensive , Its Market Anyways where People Get profit"
- #616,776
- Aug 16, 2021 2:51am Aug 16, 2021 2:51am
- Joined Mar 2021 | Status: Crazy Frog | 3,775 Posts
"Buy Cheap and Sell Expensive , Its Market Anyways where People Get profit"
- #616,777
- Aug 16, 2021 2:55am Aug 16, 2021 2:55am
- Joined Jul 2010 | Status: Always manage your risk & leverage | 7,339 Posts
not euphoria follower
- #616,778
- Aug 16, 2021 3:05am Aug 16, 2021 3:05am
- Joined Jun 2011 | Status: Trader | 1,731 Posts
Keep the Lights on then you can catch the rise from the dark.
- #616,779
- Aug 16, 2021 3:09am Aug 16, 2021 3:09am
- Joined Mar 2021 | Status: Crazy Frog | 3,775 Posts
"Buy Cheap and Sell Expensive , Its Market Anyways where People Get profit"
