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Cable Update (GBPUSD)

  • #11,921
  • May 3, 2007 3:42am May 3, 2007 3:42am
GBP Services PMI http://www.forexfactory.com/images/m...act_medium.gif 57.2 57.6 57.6

GBP PMI had no effect on the market.
  • #11,922
  • May 3, 2007 3:59am May 3, 2007 3:59am
Quoting BurgerKing
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"!
Not at all... Market "reads" fundamentals and CB officers statements and trade a "likely" rate hike beforehand. By the time the hike is confirmed, trader are much more in the side of taking profit than to increase the long positions

Only a surprise hike like BOE's in February prompts a massive reaction afterwards
  • #11,923
  • May 3, 2007 4:23am May 3, 2007 4:23am
Quoting goonergonebad
“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.
When you read the financial newspapers, especially those addressing a large audience, one number jumps out: 14,000. This is where the Dow Jones is supposed to be headed after having broken record after record to reach 13,000. Of course, 14,000 is much less ambitious than the 40,000 level that some people foresaw back in 1999. In fact, it is only 6.6% above the current level, so not such a big hurdle to overcome. But since 14,000 is a round number, we can ask a chartist.

When it comes to charts, no one is better qualified in UBS than Peter Lee,
Chief Technical Analyst in UBS. So I asked him for his view on a Dow 14,000.
First he chuckles, telling me that I shouldn't pay too much attention to the
newspapers, which were making much ado about nothing. Then, becoming
more serious, Peter explains that the Dow is not the right index to focus on.
The S&P500 is much more representative of what is happening in the US
market. And this index hasn't yet broken its all-time high of 1,553.11,
reached intraday on March 24, 2000. Peter believes this, although only
around 4-4.5% above the S&P's current level, is a rather strong resistance
point that will take some time to break through.
The correlation between the levels of the S&P500 and the less representative
Dow is 85%, and between the daily returns, 94%. Thus, the Dow is almost
always mimicking the S&P 500. It is relatively safe to say therefore that the
challenge of the 4-4.5% of the current S&P500 level should be quite difficult
to surmount - even for a record-high Dow. Moreover, the Dow-chart
shows that a "channel formation" has formed over the past few months
and this also will be rather hard to break. Therefore, although the Dow
14,000 is in reach, there are still several technical obstacles in the path. And,
when it comes to psychological numbers, 4.1% above the current Dow
brings you to 13,666, which is probably - depending on your cultural background
- not the luckiest of all numbers!
  • #11,924
  • Edited 5:05am May 3, 2007 4:32am | Edited 5:05am
The Gbp /Usd appears to be in this Simple Channel

Which way will it break ? ......

-----------------------------------------------------
Maybe the Funny-mentals will tell us something when they come out tommorow ?
Attached Image (click to enlarge)
Click to Enlarge Name: GBP-05-03-2007-#1.jpg Size: 82 KB
  • #11,925
  • Edited 5:06am May 3, 2007 4:34am | Edited 5:06am
Usd/Chf
This was the original chart post of the Us dollar
------------------------------------------------------
From 2 days ago

There 's been a minor rally since then , so the Us Dollar is firming up ?
Attached Image (click to enlarge)
Click to Enlarge Name: Swiss Franc-04-30-07-01.jpg Size: 68 KB
  • #11,926
  • May 3, 2007 4:56am May 3, 2007 4:56am
The Us Dollar is pulling back from the near 2nd Target Line of 2190
Usd/Chf ( Update )
-------------------------------------------------

( See chart below ......)

There is clearly resistance at 2185 - 2190
Attached Image (click to enlarge)
Click to Enlarge Name: Swiss Franc-05-03-07-01.jpg Size: 62 KB
  • #11,927
  • Edited 6:19am May 3, 2007 5:50am | Edited 6:19am
Quoting cesarnc
Not at all... Market "reads" fundamentals and CB officers statements and trade a "likely" rate hike beforehand. By the time the hike is confirmed, trader are much more in the side of taking profit than to increase the long positions

Only a surprise hike like BOE's in February prompts a massive reaction afterwards
I hope that was correct, because, Last year, USD kept raising rates till Jun.
BOE raised only in August. Yet from Jan to Jun, GBPUSD kept rising.

However, during this time, China hasnt mentioned about "diversification" or anything adverse agaisnt USD.


.
.
.
Applying to above mentioned observation, all this GBP bullishness based on 2 more rate hikes for the year may be "overplayed".

Is US Economy sinking? The last GDP seems to show just that and as evident by a shrinking number since last Jan 2006. 5+ to 1.3 is indeed BEARISH.
  • #11,928
  • May 3, 2007 6:23am May 3, 2007 6:23am
A Reuters poll of 61 analysts shows that they all believe the Bank of England will raise interest rates this month, to 5.5%.

But interestingly, only 14 believe that rates will rise to 5.75% later this year - and not a single one is expecting a half-point rise this month.

It just goes to show that the markets still don’t get it. Inflation is a problem, in the UK and everywhere else - and it just isn’t going to lie down and die…

Bank of England governor Mervyn King has been trying to defend the Monetary Policy Committee’s record against accusations by various economic groups that the MPC has been too relaxed about the impact of money supply growth on inflation.

His comments came as data showed that growth in M4, the broadest measure of the money supply, came in at an annual rate of 12.8% in March.

The governor admitted that “there are times when monetary developments have… [proved] a warning sign of inflationary risk.”

Mervyn King has now said that the Bank is “trying to develop models to help us to distinguish between demand and supply shocks to money”. Well here’s a clue - if the money supply is growing at double-digit rates while economic growth is in the low single digits, there’s probably too much of the stuff floating around.

And if house prices are shooting up at double-digit rates while wage growth is in the low single-digits - well, people are maybe borrowing too much.

And actually, the Bank just needs to look back at its own records to get an idea of where interest rates should be, given the current rate of inflation. The last time the retail price index was sitting at 4.8%, back in 1991, the base rate was sitting at around 10%. Now it’s just 5.25%.

That suggests rates may need to rise a lot further than certainly the economists polled by Reuters are expecting.

Of course, every mildly weak piece of data is seized upon as another reason why rates shouldn’t rise any further. Mortgage approvals in March fell to their lowest in nearly a year, which had the pundits out warning of nervous buyers.

But one month does not make a trend. The truth is that mortgage approvals are still remarkably strong given that houses are unaffordable for most first-time buyers, and that they now make little sense as an investment. Who’s buying all these houses?

If the Bank stalls on hiking interest rates, or doesn’t hike far enough, it will just add yet more fuel to the inflationary fire. If it hasn’t learned that much at least after its disastrous rate cut in August 2005, then we’re all in trouble.

Talking of trouble, in the US, the housing slump there may be beginning to show up in the jobless numbers. An early indicator published yesterday by payroll provider ADP showed that April jobs growth in the private sector was the slowest in four years.

Now the non-farm payrolls may tell a different story when they are released tomorrow. But so far jobs growth has been one of the signs the US bulls have been pointing to as evidence that everything’s going to be fine in the land of the free. What they of course conveniently forget is that employment is a lagging indicator - in the normal scheme of things, companies lose business, then start making people redundant, not the other way around.

So first the housing market collapses, then builders stop building, then they lay off construction workers - so the unemployment data is the last shoe to drop, as it were.

And yet, despite all this, the Dow Jones headed above 13,200 yesterday, continuing its merry jaunt into uncharted peaks. But as investment expert Paul Hill told us recently, “investors are showing just too much irrational exuberance”. He reckons “a sharp correction in equity markets is on the cards” – and given all the headwinds facing markets, particularly in the US, we can’t say we’re surprised.
  • #11,929
  • May 3, 2007 6:42am May 3, 2007 6:42am
hi again

Cable Now playing between 1.9870 to 1.9937


if cable break 1.9937 it will go to 1.9973

&

if cable break 1.9870 it ewill go to 1.9829


thank and Good luck to all

  • #11,930
  • May 3, 2007 7:58am May 3, 2007 7:58am
with this results and the deep in Cable I took the chance to rebuy lower My charts on ! hour is close to cross in MA and after that $HR chart will follow this retracement makes each one of the techinicals now more "dense" which lead to a cross from all the MA all at once usually when this happens the break up is strong. I holding a long at 1.9870.and opened one at 1.9907 which i closet at the spike at 1.9943 now i reopen another long at same rate 1.9907. Good luck to everybody.
  • #11,931
  • May 3, 2007 8:00am May 3, 2007 8:00am
Quoting deboooo2005
hi again

Cable Now playing between 1.9870 to 1.9937


if cable break 1.9937 it will go to 1.9973

&

if cable break 1.9870 it ewill go to 1.9829


thank and Good luck to all

It did broke 1.9937 but US Data pulled it down back to 1.99
  • #11,932
  • May 3, 2007 8:22am May 3, 2007 8:22am
Quoting BurgerKing
It did broke 1.9937 but US Data pulled it down back to 1.99
that looked like a nice pre data fake out / stop hunt.....off the 1 min chart, 1 candle up above 9937, a doji then next candle down - blinked and you missed it!
Trading Levels with WRBs
  • #11,933
  • May 3, 2007 8:28am May 3, 2007 8:28am
Market yet too excessive on the moves... This is not a 50+ pips announcement, but when good part of the market is out (Golden Week + NFP fear), we end up seeing this kind of behavior.
  • #11,934
  • May 3, 2007 8:43am May 3, 2007 8:43am
Quoting BurgerKing
It did broke 1.9937 but US Data pulled it down back to 1.99

if the news comes positive to dollar " ISM Non-Manufacturing Index , Prices" and cable didn't break 1.9877 ... so its still long so my advice to buy cable @ 1.9885 ... and if cable break 1.9877 ... so its short .... that's mean our risk is 8 pips or reverse

i hope u understand me
  • #11,935
  • May 3, 2007 8:52am May 3, 2007 8:52am
Ejector seat at the ready. One weeks hard work down the drain. Please tell us newbies not to trade through the news...
Gone to a better place
  • #11,936
  • May 3, 2007 8:56am May 3, 2007 8:56am
Quoting smikester
Ejector seat at the ready. One weeks hard work down the drain. Please tell us newbies not to trade through the news...
.........don't trade through the news........
Eish! If you don't fly with the eagles you'll scratch with the turkeys
  • #11,937
  • May 3, 2007 9:06am May 3, 2007 9:06am
met eish ja
  • #11,938
  • May 3, 2007 9:08am May 3, 2007 9:08am
GBP took a dip and now on its way up. good time to go long or wait.????
TRADE WHAT YOU SEE... FOCUS ON SUCCESS
  • #11,939
  • May 3, 2007 9:11am May 3, 2007 9:11am
Up to what level are the numbers manipulated? Up to or are it capable of lying? ....

Good questions to ask...

  • #11,940
  • May 3, 2007 9:19am May 3, 2007 9:19am
Quoting dswk
Up to what level are the numbers manipulated? Up to or are it capable of lying? ....

Good questions to ask...

IMO, you can measure the level of manipulation by the revision.... GB news show 3-5% error previous/revision. NFP had shown 30% already...

If not INTENTIONAL, then surely these numbers are run by MORONS. Make up your mind now.
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