Cable Update (GBPUSD)

USDCad short tp 1.29

Thank you brother !

A good price to buy GBP will be 1.21

I went through The Art Of Currency Trading by Brent Donnelly. Pretty well written book and covers everything important. Also No Nonsense Forex youtube channel is gold.

I see GBP/USD to continue it's downtrend and passing it's previous support at 1.1945

The Trend and GU

1H timeframe trend is not as strong indication as longer timeframe charts. Good luck

Do you think this big weekly pin is align too for a reversal ... share your charts please i am confused.

i never used pivots but i assume you wanna say it is bullish and aligned to the trend line and the pinbar i highlighted. you can comment to elaborate further if i understood you wrong.

forget pivots

usually when a spike like that happens, price retreat up but, then it will fall back down, basically tricking traders thinking the downtrend has ended and is doing a reversal but not true in most cases if that theory was correct price should have already moved up higher...

1. price went down on us rate hike
2. price came up on uk rate hike

next month price can go down again on us rate hike

i will be very much interested in next us cpi numbers to find if GU can reverse

but in technical terms, that 20 sma of the bollinger bands will have to do some serious turning first lol

USD JPY.


What I really like to talk about is trading by way of looking at mix charts (Technical) with a fundamental point of view to support what is seen on charts.

The successful 1% of traders that use the fundamentals as well as the technical.

To understand what fueled the market , it is necessary to think like a global chess player.
The international game is called collecting basis points, and the world is your chessboard.
This does not imply that you to invest globally in order to win the game, but it means that you do have to think like a global player to do well.

Because the game board involves different markets, such as currencies, bonds and stocks, across all continents and cultures, the global player has to find a common denominator or similar means of comparison for all these different markets.

Every professional defines the potential of any given market, derivative or specialized custom investment by its' potential to make basis points.

"So here is why the currency markets dictate the direction of all the other markets in the world."

Let's say you are a very rich investor in Japan.
Your wealth would naturally be tied up in the currency of your homeland.
All your wealth and bills and bank accounts are denominated in Yen.
The problem that the Yen was losing buying power, as it was becoming weaker against other nations' currencies.

Your homeland currency becomes weak when your economy and confidence in the government backing your currency falters.
The Japanese economy was in a tailspin, and confidence in the banking system was declining as well.

If you are this Japanese investor, you are losing the basis points game if you simply sit there and do nothing.
Everything you need to buy is becoming more expensive because it takes more yen to purchase all the products you depend on that have to be brought into Japan and paid for in a foreign country's currency.

You also have another problem:
The yen savings that you have sitting in the bank are not earning any interest.
The Japanese government had tried so hard to stimulate the Japanese economy by reducing interest rates that rates are nearly at zero.

So banks are paying you almost nothing on your cash.
On the other hand, it does not cost you much to borrow cash.
As the problems in Japan become worse and the Japanese government continued to lower the prime lending rate, you could have borrowed yen for less than 2% or 200 basis points.


(As a result, the spread between Japanese & US interest rates is negative & the Japanese Yen against the USD has plunged to two-decade lows.)

With borrowed yen in hand that cost very little to obtain, you and other Japanese investors only had to find something with a higher return than 200 basis points to win the basis points game.

On the other side of the world, the American government was raising interest rates because the American economy was overheating, leading to inflation.

In the US there was an employment boom, as there was a shortage of people who could fill the open jobs.
People are getting the pay they asked for, and everything else costs a little more as a result.

On the surface it looked as if the Federal Reserve was crying wolf.
Inflation? Where?
But the Federal Reserve knew that the American economy was overheating, so it continued to raise short-term rates.
While it cost American businesses more to borrow money, they earned more on their existing cash.

Let's return to the Japanese investor with cash yen on hand.
You look over at America, and you see 3 things.
The strongest currency in the world at the time is the American Dollar.
That means that if you switch your yen for US Dollars, you have just solved the problem of your buying power declining on a daily basis.
If you just put your US Dollars into an American Bank, you make basis points with your borrowed yen, since the interest rates on short-term deposits in the US are higher than those in Japan.

The banks will pay you about 3 percent for doing nothing. (Officials expect interest rates to hit 3.4 percent by the end of 2022)
That means it pays you 300 basis points on money that cost you 200 basis points, for a net gain of 100 basis points.

It gets even better.
The game is to accumulate as many basis points as possible over the year.
So you look at the American stock market.
If you buy a stock and its' price doesn't change, you will still earn more than you would if you just left the cash in the bank if the stock pays dividends.

The catch here is that US stocks pay dividends in US Dollars. Excellent.
The dividends are potentially higher than what the bank pays for just a simple deposit.

So suddenly a lot of people in Japan want large-cap US stocks, as these are the ones that highest dividends.
The DJIA may starts to rise.

Now, not only are you making money on borrowed money, but your underlying principle is beginning to increase in value, as the market is beginning to advance.
This is getting so good that you want to borrow more yen back in Japan so that you can put more money to work and increase your leverage in the United States.

While the market expands and your principle grows, there is a third factor to consider: The US Dollar itself is strengthening against other world currencies.
This means that anytime you bring your original investment home with all those new basis points you gained, you get another basis point bonus from the exchange rate when you sell US Dollars to buy back yen.


That the view of why demand vs supply change.
It's a game of basis points, and the key factor here for long term trends in currencies demand and supply is the interest rates.

Investors look first at the risk-free investments and their returns for a given currency compared to risk-free investments and their returns for another currency.
The currency with high interest or with advancing interest always wins.
As an example right now is the US Dollar.

Then they look at the low risk investments after they have transferred their money to the higher interest rate currency.
Usually these are corporate bonds.

Then they look at the medium risk investments. This is represented in Stocks.

All other fundamental factors only help to shape the decisions to be made regarding the interest rates.
Are economic indicators leading to inflation, deflation or stand still?

That's the question that the Feds keep asking themselves all the time to get out with their interest rate decision every time.

So this leads that the interest rate is getting a raise next time with a 90% probability.
If the feds are conservative, they will raise it by 50 basis points, and if they are aggressive, they will go for another 75 basis points.

So this says that other investors with homeland currencies with lower interest rates are getting more interested in US Dollar.
That's the long term trend of the US Dollar, and that's what moves the currency markets in the long term, INTEREST RATES, everything else are effects or signs and not causes. INTEREST RATES are the main cause.

So why do you want to tie yourself in a low probability trade that is even getting lower in probability with time??

Hope that I have been helpful.

The current trade on UJ. Scalping level.

Added some more higher 2250 and 60, will be holding all for a while like on chart, SL for all 2320 hard, fingers crossed

i wanna learn How interest rates effect their respective currencies?

Interest rate up/down: will it make price go higher or lower. any one can guide me on this please.

Im almost sure that EU hit parity till end of the year, probably one or two months from here, but I can be wrong too