Auslanco - GBP/JPY and GBP/USD (newstrade)

IMO price will touch 1hr 50ema before resuming downtrend

hmmm GU is touching the 5sma on the weekly, but the last weekly candle was a doji so it might break it and if he breaks next week it could go down this much

Hi gtt,
I have attended one web session conducted by e-signal for for DJI and Nasdaq. I got a another one coming up on Monday. I have no intension to trade forex. It looks very complicated compared to no frills systems like MT4.

If 237.80 holds were going back up to 240.

Is this deliberate policy?

The US dollar has spent much of the past 6 months hitting record lows against most of the world’s leading currencies, including the pound, the euro and nearly all of the major commodity currencies: the Australian dollar, the Canadian dollar and the Norwegian Krone. The US currency has fallen 20% against the Canadian dollar (the US constitutes 80% of Canada’s exports) since March, 15% against the Australian dollar since August and 7% against the euro in the past 7 weeks. Although the dollar is the weakest of the major currencies in the world this year, US politicians have grown more vocal about the weak Chinese currency (primarily a fixed rate currency allowed to trade within a narrow band with the US dollar) and have been pushing legislative bills to penalise China for its apparent currency manipulation. Yet, is the US guilty of a similar offence and is it allowing its currency slide into the abyss, deliberately. With the US dollar index at an all-time low, many would argue the currency has already reached the abyss, yet having the worst current account deficit per capita of any leading economy, does the US Administration really want a stronger dollar?

Why might the Administration want a weaker currency?

1. With the economy slowing, a weak currency makes US exports cheaper and thus helps to stimulate activity and growth in the country’s export sector.

2. Imports become more expensive and thus US products are more competitive on the home market, again helping to stimulate domestic growth.

3. A weaker currency leads to a narrowing of the country’s trade deficit, thus improving the country’s current account and international debt liability.

4. Attracting greater foreign investment (it is now cheaper for investors to buy dollar denominated assets).

5. Encouraging greater numbers of tourists and thus greater consumption of US goods.

6. The value of the country’s own foreign currency and gold reserves increases and the net liability of previously issued debt in relative terms is reduced.

The dangers of a weaker currency ?

1. Imported Inflation. Essential imports like energy are rising in price not just on increased global demand, but also because of a weaker dollar (all major commodities are denominated in dollar). This means the US will be paying more than other countries for oil, gas etc. and the inflationary impact of higher prices will be greater in the US than anywhere else.

2. Dumping of dollar denominated assets. If investors believe the dollar is going to depreciate more and more in the longer run, they will be tempted to offload their assets sooner rather than later. The sharper the dollar decline, the more acute the investor panic and this could lead to a major dump of dollar denominated assets and by consequence higher US inflation.

3. No takers for US debt. If the yield on US bills is less than the dollar’s level of depreciation, then the attractiveness of holding US debt is diminished. Indeed, in such a scenario the only nations for whom it makes sense to continue to buy dollar-denominated asset paper would be those countries that have a currency that is aligned to the US dollar, like China and the oil-exporting nations of the Middle East. Continued dollar depreciation could force the oil-rich countries of the Middle East to break their alignment to the dollar, so as to preserve the value of their oil revenues.

4. China. Arguably the one country that benefits more than the US from a weaker dollar is China. With its currency directly aligned to the dollar, the conversion of its revenues from exports to the US into the local reminbi currency is primarily the same, regardless of the value of the US dollar. As well as this, a weaker US dollar, means a weaker reminbi relative to other world currencies and makes Chinese exports to other parts of the world all the more competitive. Also, if China continues to be the major holder of US debt, more and more control of the US economy control will be given to the Chinese.

5. Stature. The US likes its mantle as the world’s dominant economy and owning the world’s premier currency. The dollar may become secondary in importance to the euro, or the reminbi, if loses its credibility and role as a ‘haven’ currency and this could greatly weaken the economic influence of the US in the world.

6. A Dollar crash. Though unlikely, it is conceivable that the US dollar could become such a liability that nobody wants to hold it and a wave of panic selling / speculative overdrive could lead to a capitulation of the currency, like that seen during the Asian financial crisis. A collapse of the dollar would plunge the world economy into crisis, but the world’s central banks and governments are unlikely to allow that to happen, not while it remains the predominant currency anyhow.

So is a weak dollar US government policy?

It is very difficult to prove but what we do know is that the current Administration has paid only lip service to the decline of its currency, so this indicates they’re untroubled. The Fed’s decision to cut rates aggressively and thus add liquidity to a domestic economy already heavily indebted, demonstrates the Fed does not expect the US consumer to pay for the country’s massive deficit, at least not in the foreseeable future. Short-term economic gain is better than long-term pain for future generations of Americans – could this be the Fed’s thinking, or is it a case of weakening the currency to shift the US deficit problem to other parts of the world. Either way, it’s a massive gamble and somebody, somewhere will be left holding the tab

From todayfx Bob and Ted's blog

Current session range.

Hi Aus from which broker is your metatrader platform? I'm having trouble with mine cause it's in a different timezone so the 4h candles close earlier. I tried another but it seems that it crashes when I use the qqe indicators. Thank you.

FXDD

237.3 is the current key area to break for the bears. That level completed a bullish bat on the 1h. Karmo also pointed out a nice S/R line that coincides with that area (which could also be the NL of a possible H&S, though the right shoulder has not yet formed).

I'm expecting a large wave down should 237.3 break. I'll send you guys some post cards as my south-bound ship docks into a few destinations. The waves are a bit rough at the moment but I am expecting calmer waters soon.

1. Friday, October 12th, 2007 (8:30 a.m. New York Time) USA
Tomorrow we will have one set of reports that are worthy watching and possibly trading, and that's U.S. retail sales and PPI. The most important reading out of all 4 readings will be the retail sales CORE which is expected at 0.3%. Usually in September retail sales out of the U.S. is coming out strong. However, the last year and now retail sellers have been reporting worse data than everybody is expecting. They are expecting 0.3% which is basically nothing comparing to the last month it went down by 0.4%. If retail sales core reads at 0% or negative, that would be even worse than everybody is expecting, and probably bad for the U.S. dollar, and GBP/USD may possibly go up by 40 pips or more in the first 30 minutes of the report. The reason why I am saying 30 minutes is because we have Bernanke speaking 40 minutes later, and you don't want to be in trade with retail sales while Bernanke speaks because he may say something that may completely change the market direction. On the other hand, if the retail sales comes out at 0.6% or higher, that would be a pretty good rebound, more than everybody is expecting, and even more than decline of the last month, and I think based on that GBP/USD may possibly go down by around 40 pips or more in the first 30 minutes of the report. We also have the headline retail sales which normally does not conflict but watch out for any possible conflicts here. There are also possibilities for revisions, and we also have the PPI. The core PPI is the most important one but, unlikely to the headline number, it almost never deviates significantly as it is a very steady indicator. If there is a conflict between PPI and retail sales, we may see a retracement on the initial spike but I think the retail sales will pull this move out. Obviously, because so many indicators are coming out at the same time, it is always hard for me to do any analysis here so use the triggers if there is no big conflict. If there is a big conflict, then you need to look at it and judge, possibly just stay out. After the spike I would like to enter within 10 to 15 pips of the pre-release price, and maybe use 20 pips stop loss, and try to get 20 to 25 pips profit. Obviously, if you are able to enter with a price that is very close to the pre-release price, your SL can be smaller and TP may be bigger.

US news

Aus: QQE showing us anything about the news?

going up GBP/USD news spike..

4hr trend is down it may catch up later on.

i was wondering what that spike was about.

Two more charts and some analysis before I head out to paint today. Nice bullish divergence chart you showed earlier, Aus. I think your chart was a 15M. Here are two more charts, the 30M and the 1H, showing some bullish divergence. I am guessing that price won't have enough steam to move up and cause the 1H QQE to cross back up. I do think we could see it move up to the 30M 50EMA, around 238.40, or even the 1H 50EMA, around 238.70. At that point my guess is that the 4H divergence, along with all the other bearish indicators, could send this thing back down to some of the TP points mentioned throughout the last day on this thread. I'm bummed that I won't be able to trade this session. Have fun, guys.

M2B

PS- The divergence shown on the 1H is called 'inverted divergence' and signifies a trend continuation, which means price will continue to run in that same direction for awhile. Note my potential projections in the above post.

according to technicals the news release will be GBP positive.. on GBP/USD

I'm going long on GBP/USD 10 min before the news..

I was stoped out 237.88 ouch now it seems to be going my way oh well

is that a priced in?
leaking news?

my shorts are not liking this price action.