Cable Update (GBPUSD)

Cable performed overnight as expected, actually going higher by 30 pips to 1.9630 or so.

That was Phase I of "the" plan for today. Phase II called for cable short 60-85 pips or so but I had expected it to flatten out at 9598 - 9605. Currently bid at 9608, which is close enough. Knock of 80ish pips, gives me a target of 9520 for today. Others in FF citing low 9400s as TP by tomorrow.

Only question is timing: short now or after the news?? If new home sales picked up (and it's a seasonally adjusted number), then this could be the impetus fueling cable short. I think builders reduced prices and added incentives for buyers this last quarter so I expect a rise in home sales. On the other hand, if new home sales evaporated, then cable will go long as some here suggest. But when BB and COT and everybody tells you the world is long, doesn't that raise a hint of contrarian suspicion?

Market is waiting for the news. I've placed my shorts.

Trade well everyone, and prosper.

Hey yulvme

If I could get just 20 pips a day I would be a happy bunny!

And if you're straddling this news announcement, please be wary of whipsaw in this thin market....

Cable plus 20 just like that; Euro also...

USDJPY down. But I still don't trust 9620... Out & watching

I just don't see it long. Even with the "Cesarnc Channel" price should bounce short. Plus watching these prices makes me expect a last minute price spike UP....followed by a quick reversal to the downside. I personally wouldn't straddle this announcement.

Cable down 10... can you spell w-h-i-p-s-a-w??

I also see short, back in the channel. But, who knows? I'd like to make my pips no matter the news... But clock's ticking...

Notice what happened the last 15 minutes or so.....cable and euro spiked up 20 or so pips, then retraced back to 9605. That's what I believe will happen when the news hits, only the fade should be greater.

@#$$@#$%@%@#$ 9600

I went short at 9603. Expecting it to lose some pips before the New Homes numbers. I don't expect New Homes sales will live up to expectations.

Yeah Cesar, I know what you mean!! BTW USD/JPY and USD/CHF turning bullish, meaning cable should turn bearish....

Yeah... I wasn't confident that Cable wouldbreak 9620, that's why I wasn't "trusting 9620". It bounced at it... Now, 9600 must be broken to boost the down trend, don't you think?

If 9600 not broken before the news, the news will be the impetus for the short, IMHO.

Pretty obvious, just wanted to point out divergence in this double top.

CNBC just noted UAE selling dollars in favor of euros?? Anyone here that?

USD/JPY just dropped a few points....

Yes Money Master, heard the same report. Not much reaction yet. I think it is old news being rehashed.

Dec. 27 (Bloomberg) -- The dollar dropped the most in a week against the euro as the United Arab Emirates said it will convert some of its reserves of U.S. assets into the European currency.

The dollar also had its biggest decline versus the yen this month before a U.S. report that may show consumer confidence fell for a third straight month, fueling bets the Federal Reserve will lower interest rates next year. The U.S. currency has slipped 9.9 percent versus the euro this year, its first slide since 2004.

``The U.A.E.'s decision to relocate its reserves is part of a theme that means that U.S. dollar holdings in global currency reserves are decreasing,'' said Hans Guenter Redeker, head of currency strategy in London at BNP Paribas SA. ``The dollar is going to lose support as we see Fed rate cuts next year.''

The dollar fell to 118.63 yen at 7:17 a.m. in New York, from 119.15 late yesterday. The currency slid to $1.3158 versus the euro, from $1.3098. The euro traded at 156.09 yen, from 156.04, after touching a record 156.43 on Dec. 21. The dollar has risen 0.8 percent against the Japanese currency this year.

The U.A.E. will switch 8 percent of its reserves from dollars into euros before September, Sultan Bin Nasser al-Suwaidi said in a Dec. 24 interview in Abu Dhabi. The U.A.E. has started ``in a limited way'' to sell its dollar reserves, he said.

The Gulf state is among oil exporters including Iran, Venezuela and Indonesia that are looking to shift their currency reserves into euros or price their oil products in the 12-nation currency.

U.S. Slowdown

The U.S. Conference Board's index of sentiment due tomorrow will probably drop to 102 this month from 102.9 in November, according to the median forecast of 48 economists surveyed by Bloomberg News. MasterCard Advisors also said holiday retail sales this year grew at a slower pace this year than in 2005.

``The data are likely to add to an economic slowdown scenario that may prompt a rate cut in the first quarter,'' said Masashi Kurabe, a currency manager in Tokyo at Bank of Tokyo- Mitsubishi UFJ Ltd., a unit of Japan's largest lender by assets. ``The bias is to sell the dollar.''

Thanks for the confirmation fxkenny.