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

thanks to aus for analisis

Duh, duh, duh, duh! What's up with them Packers and the old guy playing QB? Congrats to you and your team so far, Petra.

M2B

M2B,

Thanks for the samples.

TTN ANALYSIS: FED MEETING, HISTORY TO REPEAT ITSELF? AN ARGUMENT FOR A 50BPS INTEREST RATE CUT
- Summary: Ben Bernanke is obsessed with history. He has spent much of his academic career studying the Great Depression, and he has often described himself as a Great Depression buff. As we will explain in this note, his aggressive 50bps rate cut at this year's September 18 meeting offers more evidence of his reliance on historical lessons. The U.S. economy is being challenged by a significant construction decline, increasing the chances of a U.S. recession. All recessions have been accompanied by construction declines, but not all construction declines resulted in recessions. In both 1967 and 1995, there were year-over-year declines in residential construction, but the U.S. escaped recessions. Bernanke obviously wants a repeat of the 1995 situation, and given his obsession with history it seems likely that he would use the 1995 Fed reaction as a blueprint for his near-term decisions. If this is the case, Bernanke may be more aggressive about cutting interest rates than markets currently expect.

**Unexpected 50bps rate cut on September 18 shows that Bernanke is applying the lessons learned from history**
- In August 1998 the Russian debt default and the collapse of Long Term Capital Management in America led to the same sort of financial disruption seen recently in response to the sub-prime mortgage mess. The Fed did not initially respond aggressively with cuts in interest rates, only cutting by 25bps at the September 1998 meeting. In the weeks leading up to the September 1998 meeting stock markets had an anticipatory rally, expecting a rate cut (similar to what we saw ahead of this year's September 18 meeting), but sold off when the FOMC 'only' cut by 25bps. Panic returned to markets, and two weeks later Fed chairman Greenspan was forced to call an emergency meeting and cut rates again, by another 25bps.
- Some have suggested Bernanke learned from Greenspan's experience of 1998 (i.e. cut by 50bps immediately as opposed to two separate cuts of 25bps).
- Bottom line: Bernanke's unexpected, aggressive 50bps rate cut at this year's September 18 meeting suggests that he relies on history to guide his decisions.

**If Bernanke applies the lessons learned from history, he could be more aggressive about cutting rates than markets expect**
- All recessions have been accompanied by construction declines, but not all construction declines resulted in recessions. In both 1967 and 1995, there were year-over-year declines in residential construction, but the U.S. escaped recessions. Several analysts have suggested the reason the 1995 housing slump may not have triggered a recession was that the Fed acted fairly quickly to reverse the effects of the seven Fed funds rate increases from February, 1994, through February, 1995 (6.0% from 3.0%).
- Bernanke would obviously like to avoid a U.S. recession, raising the possibility that he will use the 1995 situation as a blueprint. If Bernanke tries to mimic the Fed reaction in 1995, he could cut rates by another 50bps at this week's meeting. History has shown that, in order to avoid a recession amid a construction slump, interest rates should be cut quickly and aggressively.

**Bernanke is not afraid of the damage that a 50bps rate cut would do to the USD**
- On October 15 he said that history suggests that price gains from a weaker dollar are small.
- The weaker USD helps to offset the weakness of the housing market by boosting U.S. exports. It is possible that Bernanke would like the USD to weaken more, especially if he isn't convinced that a weak USD will lead to inflation. A 50bps would materially weaken the USD, boosting U.S. exports and limiting the impact of the housing slowdown.<TLT USD/JPY EUR/JPY GBP/JPY AUD/JPY NZD/JPY GBP/CHF EUR/CHF EUR/USD USD/JPY GBP/USD USD/CAD USD/CHF AUD/USD NZD/USD

Here's the new system I'm working on..

5sma High
5sma close
5sma Low

On all the TF

Please dont ask any questions until you study the price action of this channel.

current weekly Bar,

Interpretation:

Price reached the 5sma close,
Momentum pointing down on 10C,
The price could bounce back down to 5sma LOW . The weekly is within the channel( Ranging)

In learning this, from what aus posted there, if there the dollar weakened in the over-all results, wouldn't that make the gbp,eur, etc... stronger because investers would turn to them to invest in? or would usd/xx pairs go up because investers see the usd on the road to recovery?

Thank you for your in-put to this noob Q

Hey Aus. I've used the 5EMA High/Low channel before, but never the 5SMA. It is a great channel to work from. I'll check it out.

M2B

On vacation??
Thanks man!!

Aus, are you still standing my your claim of 235.70 retracement?

Daily:
Interpretation:
Price broke through the 5sma High( dropped back into the ranging channel) due to strong bearish momentum from 1C and 14C
Very high possibility for the price to reach the daily 5sma CLOSE.
5 sma low is the lowest the price could reach today since the daily bar has no 10C momentum support.
If tomorrow's bar forms below 5sma Low and have the support of all three momentums (pointing down) thats a free fall.
If the tomorrows bar forms above 5sma High and all three momentum pointing up thats a 300 pip bullish bar . Within the channel the pair is ranging and your TP level can be the 5sma levels.

attachment61633 look at chart comments...quote from 3pm.Est

study this channel on smaller TF (30Min and 1hr)

long 235.80.....will check how asia closes before adding.

Profitable trading
Breeze

MOM still down

Ok.. guys.. I will see you later .

Bro

Thank you for your time and effort to teach us the finer points of your system. You changed everything I now know about forex.

You rock!

M2boy

I regret the comment about you signature. I added it as a humorous afterthought. I should have googled it first, I had no idea it was religious in nature. I would not disparage ones spiritual beliefs just because they are rude. I Apologize.

Auslanco short trade from 236.70 is still open.....