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Cable Update (GBPUSD)

  • #12,281
  • May 8, 2007 10:59am May 8, 2007 10:59am
First post here, so please forgive any inconsistencies...

Cable seems to have broken out of the 4h uptrend channel during the beginning of the month. Its been in a pretty tight downtrend channel since April 18th. The last few days have brought a few unsucessful tests of channel resistance so the current downtrend seems to be holding firm for the time being. That being said, just from looking at the charts, I see a small support level below 1.9890 at 1.9864 and and much stronger support at just below the 1.9840 level given by the channel's current low (1.9842), the D1 23.6% fib (~1.9834), and the H4 61.7% fib (~1.9832). Channel support is not much further below that (~1.923). A possible turning point around the 1.9830's??? Anyone care to comment?
  • #12,282
  • May 8, 2007 10:59am May 8, 2007 10:59am
Quoting camisa
Warper, I already told this here in the thread: fundamentals can be wrong for an eternity! Only reality is always right!

For a daytrader like me how can I care about inflaction, interest rates etc.? I just trade the charts, the time frame one uses to trade is very important here as different time frames must take into account diferent aspects of trading

one person here said very surprised last week: "what? how can you say that? the trend is up!"

he forgot that there is a trend for each time frame!

As for my trading system i'm sorry but I won't disclose it, probably nobody could trade it anyway, a trading system must reflect our personality so it's a very personal thing

EDIT: one thing I can tell you: it's a very complicated system, I couldn't find any KISS system that suited my style of trading
You are right everyone has to develope their own system that fits them. I am happy yours is working for you. Thanks for sharing.
  • #12,283
  • May 8, 2007 11:01am May 8, 2007 11:01am
wraper,

for me technically there are many reasons to sell today at 955

as attached chart prices are test the upper line of my pitchfork and shows a sell signal with min. target at 888 (the lowest value until now)

also according to PA guys there are Double top bars that close lower
and if you look at the previous day candle we can say it pin bar
and if you look at indis there is bearish H. Divergence at 4H & 1H

may be others see something else ...
Attached Image
  • #12,284
  • May 8, 2007 11:10am May 8, 2007 11:10am
Quote
First post here, so please forgive any inconsistencies...

Cable seems to have broken out of the 4h uptrend channel during the beginning of the month. Its been in a pretty tight downtrend channel since April 18th. The last few days have brought a few unsucessful tests of channel resistance so the current downtrend seems to be holding firm for the time being. That being said, just from looking at the charts, I see a small support level below 1.9890 at 1.9864 and and much stronger support at just below the 1.9840 level given by the channel's current low (1.9842), the D1 23.6% fib (~1.9834), and the H4 61.7% fib (~1.9832). Channel support is not much further below that (~1.923). A possible turning point around the 1.9830's??? Anyone care to comment?

Welcome to this thread. Your analysis is sound in my view. I am targeting 1.9850 then 1.9820 level. Key thing you mention is the 4 hour up trend being broken and that we are now experiencing a downtrend.

I think this downtrend channel from 18th April will be ok to follow until Thursday. Thursday is a key day for obvious interest rate announcements and will help set the direction cable will trade for a while.
  • #12,285
  • May 8, 2007 11:18am May 8, 2007 11:18am
I am trieing to understand cable movements, so...BOE will increse in. rates by 25p, thats almost 100% clear, so the only speculation here is will they increase by 50p. So it turns out that cable is heading down. why? because there is no surprise in riseing rates by 25p, they already are in price. Please correct me if I am wrong
  • #12,286
  • May 8, 2007 11:26am May 8, 2007 11:26am
Quoting el_duende
Welcome to this thread. Your analysis is sound in my view. I am targeting 1.9850 then 1.9820 level. Key thing you mention is the 4 hour up trend being broken and that we are now experiencing a downtrend.

I think this downtrend channel from 18th April will be ok to follow until Thursday. Thursday is a key day for obvious interest rate announcements and will help set the direction cable will trade for a while.
It seems to me that the 1.9820-40 area would be a nice place for cable to be when the news comes out on Thursday, but maybe I'm getting ahead of myself.
  • #12,287
  • May 8, 2007 11:27am May 8, 2007 11:27am
hmm ok. At the end of this week, 1 of 2 things will happen for me.

One... i end the week with more 50 percent profit or Two... i waste half of my last month profit. Its not a crisis but one or other way, i get richer in knowledge. And i will sure have another opinion on fundamental forex.
  • #12,288
  • May 8, 2007 11:32am May 8, 2007 11:32am
forget about economic releases; if price followed economic releases then everyone would enter just after the numbers and everyone would make money!

when price follows the number everyone says that price is acting according to economic data; but when price reverses on economic data everyone says that "that news was already priced in, so price is fading news", or is a case of buying the rumour and selling the fact

fact is that price lot's of times doesn't do what would suppose to do in face of the underlying economic data so we're back to technical trading as the best way to trade...
  • #12,289
  • May 8, 2007 11:38am May 8, 2007 11:38am
Quote
I am trieing to understand cable movements, so...BOE will increse in. rates by 25p, thats almost 100% clear, so the only speculation here is will they increase by 50p. So it turns out that cable is heading down. why? because there is no surprise in riseing rates by 25p, they already are in price. Please correct me if I am wrong

True - market has already priced in the 25 base point hike.

In my view leading up to 18th April there was lots of talk of a 50 base point hike on the back of high inflation economic news in UK, this coincided with the new high in cable at 2.0133. Market since then has seen a drop as economists etc believe it seems more likely only 25 base point hike will appear.

Also ex MPC member on TV today believes 25 base point hike will happen this week and then in August another 25 base point hike will occur.

=================================================

Loopy I also have a suspision price will be around this 1.9820 area on Thursday just before the announcement or near to the bottom line of that trend channel. Things can change quite quick in forex though!
  • #12,290
  • May 8, 2007 11:58am May 8, 2007 11:58am
At the end of this week, 1 of 2 things will happen for me.

One... with the "fire power" im using, i end the week with more 50 percent profit or ... i waste half of my last month profit. Its sad but its not a crisis. One way or the other, i get richer in knowledge and i'll sure have another opinion on fundamental forex.

PS: Ratman you are right. But the problem in this case is that, the only reason today is not about "priced in". "Priced in" efects makes ppl take profit in longs sooner than previous highs (in this case) because the confidence in higher highs ends. The drop today i believe is pure technical stuff and as soon as it ends and the chart give no more reasons to drop, what do we have left? A growing economy against a fragil one (at the moment).

The probable scenario, is tomorrow the FOMC continue a little hawkish and the GBP goes to the major Fib at 1.9770, and then during the next months the price will go back to 2.0000 and behond.

If the news later in the day are good the price might go up a little bit and get away from that far fib, so if the hawkish statement comes out it will be dificult to go there, as the price will only have thursday to do it, and i will laugh if i see the price dropping fast in a interest raise day.

Who said that trading is boring? Im not bored for sure lol.
  • #12,291
  • May 8, 2007 12:11pm May 8, 2007 12:11pm
Quoting el_duende
True - market has already priced in the 25 base point hike.

In my view leading up to 18th April there was lots of talk of a 50 base point hike on the back of high inflation economic news in UK, this coincided with the new high in cable at 2.0133. Market since then has seen a drop as economists etc believe it seems more likely only 25 base point hike will appear.

Also ex MPC member on TV today believes 25 base point hike will happen this week and then in August another 25 base point hike will occur.

=================================================

Loopy I also have a suspision price will be around this 1.9820 area on Thursday just before the announcement or near to the bottom line of that trend channel. Things can change quite quick in forex though!
I am more consider about USD rate this week......./ FOMC
I Deeply Love My Virtual Life In Virtual World , RLC
  • #12,292
  • May 8, 2007 12:50pm May 8, 2007 12:50pm
Quoting camisa
?

..I always use a stop loss of 50 pips and a profit target of 100 pips for my positions on cable and always close them manually by 22:00 London time if they haven't reached any of that targets
...
If your system is automated or you have time to backtested on paper, try this:

1. SL 70
2. No TP
3. Move to BE at +45 and then trail stop by 20 pips.

According to the back test that I ran, this setup is a lot more productive then any SL+TP setup.

If you're interested, I can give you my way for EOD closing, which is also more productive per back tests than simply closing trades EOD.
  • #12,293
  • May 8, 2007 12:50pm May 8, 2007 12:50pm
To many chartists, it is not bear season just simply because it broke 1.9900. It needs to break 1.9840 to be considered really in the bear season.

I however have considered it bearish the moment daily MACD headed downhill. We are in consolidation phase right now and could easily see a reversal. FOMC this wed is a big risk factor for USD bull so be weary.

I would be carefull to short GBPUSD just yet but will wait for pullback to mid near 2 to be safe during consolidation phase.
  • #12,294
  • May 8, 2007 12:52pm May 8, 2007 12:52pm
Quoting pino2
Hi everyone,
GBP/USD was closed @ 1.9930
EUR/USD was closed @ 1.3593
I have a feeling that the following scenario will happen on Monday

GBP/USD will try to break 1.9940 which was the high of Friday and it will aprox reach 1.9950-1.9960, and then will go down to the daily pivot 1.9904 and it might go further down to reach around 1.9870

EUR/USD will try to go up to break 1.3610 it might reach 1.3620 but won't break it and then will go down to 1.3560-1.3570

I will wait and see if this could happen
From my side if GBP/USD failed to break 1.9950-1.9960, I'm short from there targeting 1.9810.
And for EUR/USD if failed to break 1.3620 I will short from them trageting 1.3530

Best regards and happy trading
EUR/USD short @ 1.3610 closed @ 1.3530 = +80pips
GBP/USD short @ 1.9960 still open with +75 unrealized pips
  • #12,295
  • May 8, 2007 12:54pm May 8, 2007 12:54pm
Quoting BurgerKing
To many chartists, it is not bear season just simply because it broke 1.9900. It needs to break 1.9840 to be considered really in the bear season.

I however have considered it bearish the moment daily MACD headed downhill. We are in consolidation phase right now and could easily see a reversal. FOMC this wed is a big risk factor for USD bull so be weary.

I would be carefull to short GBPUSD just yet but will wait for pullback to mid near 2 to be safe during consolidation phase.
I'm with you.
This consolidation is purely technical.
  • #12,296
  • May 8, 2007 12:56pm May 8, 2007 12:56pm
Will close GBP/USD @ 1.9870 if reached, low for today 1.9877, 7 pips to come, and I will not open any new trade now, will watch and see, to catch good price
  • #12,297
  • May 8, 2007 1:05pm May 8, 2007 1:05pm
Well, there is a positive divergence forming on the hourly chart. Thus, the price would pop till at least 1.9925 (IMO).
  • #12,298
  • May 8, 2007 1:07pm May 8, 2007 1:07pm
Quoting pino2
Will close GBP/USD @ 1.9870 if reached, low for today 1.9877, 7 pips to come, and I will not open any new trade now, will watch and see, to catch good price
Not an advice but i think 1.9880 is a good price to get in...
  • #12,299
  • May 8, 2007 1:12pm May 8, 2007 1:12pm
Prices might fall to reach 1.9845-55, but as I mentioned I won't go for any new order ahead of the FOMC
  • #12,300
  • May 8, 2007 1:39pm May 8, 2007 1:39pm
If Cable brks the support @1.9912 it will go down to 1.9882

targets were reach!
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