Cable Update (GBPUSD)

Price stalled at the 50 fib and that could cause the reversal. I still like my 9598 (yesterday's high) or even your 9605 which appears to be a resistance level but that fib and/or the 00 may provide formidable resistance.

Dec. 27 (Bloomberg) -- The pound is poised for its biggest annual gain since 1990 as it became the world's third-most popular reserve currency and the Bank of England lifted interest rates to their highest in five years.

Britain's currency has risen 14 percent versus its U.S. counterpart this year after the central bank unexpectedly raised borrowing costs in August and increased them again last month. The pound has also gained against 15 of the 16 most active currencies tracked by Bloomberg and is now 4 cents shy of the $2 milestone, which it last touched 14 years ago.

``At the start of the year the market was looking for rate cuts and instead it got 50 basis points of rate hikes,'' said Chris Turner, head of currency research in London at ING Groep NV, the largest Dutch financial-services company. ``We're also big fans of the reserve diversification story and a big chunk of new currency reserves is now going into pounds.''

Against the dollar, the pound traded at $1.9581 by 5:45 a.m. in London from $1.7187 on Dec. 30 last year. The annual gain of almost 14 percent is its biggest since 1990, when it surged 19 percent versus the dollar. Turner expects the pound to touch $2.10 by the middle of 2007.

The central bank said Nov. 9 it expects inflation to ``rise further above target in the near term, but then fall back as energy and import price inflation abate.'' Bets by traders on a further interest-rate increase by the Bank of England are also helping boost the pound.

Where is she going? Come on give us that retracement!

She blew through my resis levels, I'll have to wait and see what happens, wish I was still riding that long.

Curious to see if she comes back below 00 soon!

could be the down move starting now short at 1.9618

looks like alot of stops were cleared above 9600 within the past 20 min, lets see what happens

The only thing is I HIGHLY doubt the US new home sales report in the morning will be good. My reasoning is the housing market typically stinks during this time of the year and we're coming off a bubble so IMO I don't think it will be surprisingly good but then again the US loves cooking the books, LMAO!

The negative reversal in momentum is still valid, am still looking for confirm of top to take ride back down to double bottom low or beyond. I think we have probably seen the top at least until the new home sales comes out.

might this be a staging for tonight or last rally of this year/week for the 9700s before it comes back down... for good through 07... we shall see

The latest CoT report from the CTFC as at 19 showed record long positions for GBP.

Just a quick question - if everyone is long then who will be selling ?

Hmm....

was that a retrace to 9570 or major dowmward trend??

I'm keeping a close look at Dec 22 @ 1100GMT. Looks like the same behavior is taking place so far. As soon as it clears 9580-9590 area we may have a profitable day down to 9500...

it just topped 1960 then back to 19595, the yo-yo is back in town!!!

I wonder sometimes if some of the people that post in here are just bored and typing up anything th at comes into their mind. or have anything reasonable to say~.. if it's just a guess and no solid ground for those comments, i suggest you keep them to yourself~

hey cesarnc, from 1800 yestarday til 0130, it moved about 110 pips and i guess the retrace was the 40 pips it has given back since then, if i read the numbers right. is this a pause for a further climb now, or will it wait until the housing numbers to move since you never know what the numbers will say, or will there be a trend before dawn that could care less about the numbers??

I Think we should have one more push up to 9640 - 50 then down. Looks a 3 wave up.

lightn up, francis!!!

That's the million dollar question right now. I don't try to predict further moves. Instead, I wait for price+indicators to align in such a way that you can "read" the trend for the day.

Right now, price+indicators are repeating Dec 22 pattern, what MAY SUGGEST that they will align in such a way to indicate a long down move.

But a sudden 100pip up boost is never out of the picture. Next 30min to 60min is "watch only", in my opinion.

For the record, I have no position @ market right now AND this is the way I do thing here, ok? Not a suggestion of how it should be done.

Chf has been holding between the 38.% and 23& fib. Clearly wanting to push downward, hasn't got the energy for that push yet. Due to this effect if chf does force it's way down again, euro would reach new highs and so will Cable.
I've had the pleasure to share dinner with someone that really knows oversea trading very well over xmas. His comment is that it's unlikely cable would push through above 2.00, very slim possiblity. channel trading for the next 2 weeks to get the market on track.