Cable Update (GBPUSD)

Yesterday (Tues) was a pin bar - but not today.

Open and close need to be at one end of the bar and other end of bar should extend either lower/higher than previous bars.

I agree with you too. It is time to short. I'm short at 1.9949

Your avatar is nice, can I borrow to use it?

hehe.

im still long at 1.9873.

is the trend broken?

Daily MACD has fallen since GBPUSD peaked last April 18.
We are getting lower highs and lower lows since.

But since NFP is the major risk event for the week, I would not go shorting this pair long term just yet.

Talk about flatlining... a range of two pips for the past two hours...hehehehe

“Dow 14,000?”

The headline on Barron’s this week follows on from the financial newspaper’s prescient prediction that the Dow would hit 13,000, and suggests that the bulls on Wall Street are still hopeful about corporate prospects.

But as stock markets across the globe head ever higher, so the signs for the global economy worsen. Last week, US GDP growth was far lower than expected for the first quarter, coming in at just 1.3%, the weakest in four years, compared to the 1.7% forecast by analysts.
But never mind – if things get too tough, the Federal Reserve will just slash interest rates. Won’t it?

Everyone is relying on the Federal Reserve to come to the rescue and slash interest rates if the US economy does indeed look as if it’s heading into recession.

But this won’t be easy. The dollar set a fresh all-time low against the euro just last week, falling to $1.37 against the European currency. Bear in mind, this is at a time when it looks like the eurozone’s commitment to a single currency is heading for its first real test - the public in both Spain (where house price growth is slowing) and Ireland (where house prices are now actually falling) are about to find out the downside of living in countries which are unable to set their own interest rates - so for the markets to be putting more faith in Frankenstein money than the world’s reserve currency says something disturbing about the dollar.

If US interest rates fall, so too will the dollar - and that means more inflationary pressure, as the falling greenback makes imports more expensive.
But it’s not just about the dollar. On top of that, the cost of living is rising. As we’ve mentioned before, the next big inflation threat - the ’new oil’, if you like - is going to be rising food costs. Bedlam Asset Management has just put out an excellent report on this.
The group points out that in real terms, the price of food has fallen by 80% over the last 30 years. But “it must be expected that basic food prices must double in the next five to ten years” which would only take them back to “half their historic average”.

There are several trends driving this - America’s wasteful use of food (corn) to produce ineffectual biofuels such as ethanol, rather than importing the far more efficient sugar-based variety from Brazil; the fact that the world’s population is becoming larger and wealthier, and thus demanding more from their meals; and changing weather patterns.

None of these problems are insoluble, says Bedlam – but it will take a “surprise crisis” as they put it, for action to be taken. And “in the meantime, investors should expect much higher food prices and shortages, for these structural imbalances are a new long-term trend.”

So the Fed is still caught between a rock and a hard place on interest rates, and Ben Bernanke knows it, which is why he keeps treading a tightrope whereby he constantly leans against market expectations; highlighting inflationary pressures when Wall Street is positive a rate cut is just around the corner.
As James Ferguson recently wrote “Every US macro economist out there is adjusting their economic models from slowdown to recession – or at the very least a near-miss.”

Bernanke knows tough times are coming - he’s just hoping to ease us into them, rather than precipitating a full-scale panic.

Looks like we have quite a technical day yesterday as prices were promptly sold-off.

Technically we shoul be lloking at some retracements off the daily trend and if were to continue 920-930 should provide enough resistance to push prices back down. On the hindsight, price have failed to clear the 860s again. As long as we are trading around these regions, i shall say that we are still caught in speculative price action there is really no market leads...at least not until the bears clear 860s. Or the bulls rise up beyond 0100 10th may is fast approaching...looks like th options that sells at 0400 is going to be banana notes for holders, could expect a huge cry from there onwards.

regards
Jest

Seriously, i have seen this inflation going on for a very long time...and its really getting dry.

The feds are keeping this at bay very well. If you ask me i think the real pain for US right now is China...this is whats forcing US to continually devalue so that they could keep the wages high and trades attractive. Internally their economy is doing very well indeed. This is reflected at their very attractive stocks.

At the end of the day, the chinese will have to fall back on the US coz they will need to get oil, and guess who controls the worlds' oil, so much for risking american lifes in Iraq without any real agenda? Right now for US its a matter of holding power, a growing nation like China will have to bow and seek resouces to continually keep their growing demand as they industrialise further. They are currently the biggest oil consumer.

Look for oil prices to rise.

regards
Jest

I agree, it is a bit of a tired story now and Money Week are renowned for their doom and gloom perspectives. But, facts are facts and at some stage the inflation issue as well as trading relations with China have to be addressed.

Looking for cable to break 9925 now. Target 9975 for today.

Hi all

Cable is too near from 1.9974 ...now when it's brake 1.9929

done ;-) but i've changed mine ...

Brits at odds with Frankfurt at the moment.

Can you guys suggest any good sites for avatars, I´m still looking!

Here's what I found. I hope you find what you're looking for.
Regards...

www.avatarity.com

Or Google / Pictures / Search...

Thanks guys

Very interesting info on history of rate/price...

From 1984 to 1985, the Bank of England (BOE) adjusted rates upward from 8.8% to 13%. All the while Sterling suffered a sharp selloff to an all-time record low of $1.05 per US Dollar.
From 1989 to September 1992, the BOE slashed rates from 14.8% to 8.8% EVEN AS Sterling soared past the $2 mark to initiate the infamous "Black Wednesday" of September 16, 1992: on this day, the Pound was ejected from the European Exchange Rate Mechanism after speculation drove prices out of its allowable daily range.
From 1998 to July 2003, the BOE cut rates from 7.5% to 3.5%, a period marked by a powerful, multi-year rally in the British Pound from 2002 until hitting a 12-year high against the US Dollar in 2005.
From November 2003 to January 2007, the BOE lifted rates from 3.75% to 5.25%. During this time, Sterling endured a severe downturn from 2005 to 2006 that saw its value hit a two-year low before reclaiming the upside.

Same thing happened with USD.
Last year, everytime USD raised rates, USD weakened against the other currencies (check my historic charts).

It appears that Interest Hike and Currency strength are "inversely proportional"!