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

A positive NFP would make the monster & cable tank correct?

Based on the daily Momentum

The file doesn't open

Not necessarily. . .

UJ x GU = GJ ( USD/YEN X GBP/USD)

If USD is bought and GBP is not GBP/USD could go lower. That means UJ would be holding GJ up
If GBP is bought while USD is bought GBP/USD could hold steady, that would mean UJ is dragging GJ up

Theres more to it than this but obviously this is just one of many ways it could play out. . .

Technicals + Fundamental + Strategy + Price Action is what you must stick to and monitor. . .

Hope this hleps. . .

re-read and edited mistakes. . .

hey guys this is a cleaned up 4hr chart w/o all the stuff or you wouldn't be able to see anything, lol. this is what i am looking at. the white fib is from 241.34 down to 221.27 and the green fib is from 221.27 to 229.28. the yellow ma is a 100ema and the red ma is a 50 ema, just keeping it simple. as u can see the 50ema, green 38.2% fib and white 23.6% fib are in the 226 area serving as resistance and we have had a double top at the 229 level and the weekly mom's are bearish so i have a bearish bias. we have a nice downward channel or possibly a wedge in which i suspect we may see the bottom of but we have a daily pivot and ds1 to get through (along with 5 sma close/low which is not shown) so i would expect a bumpy/bouncy ride. with a good nfp (if we are in the 225-226 range or lower at time of announcement) we could easily see 222-223 area just depends on wording, revisions, etc. for the bulls. a break and close above 226.20 puts us outside the channel and could see the geppy reach 226.77 (dr1) to 227.20 area (100ema, 23.6%fib) initially then futher, though i doubt it. this is all IMO. use aus' strategy systems for entry points if you are not in a position. hope this helps. please evaluate yourself and trade according to your plan

LOL Best post ever!

no way but thanks

If only it were that black and white.

I'm trying to get my head round this stuff myself, but this is how I'm seeing it. Feel free to comment and/or correct.

One element of the carry trade is the interest swap - the difference between the two nations currencies interest rates. Yesterday, the BoE reduced interest rates contrary to about 66% of economists consensus yet, apart from a spike, the pair has moved little in the direction we might have expected.

There have been some that are suggesting (with the evidence of the last few days) that the carry trade has become 'disconnected' to equity movements (ie. which we generally accept that DJIA is a good measure). Simply put, the carry trade thrives when equities do well, investors borrow at the cheap Japanese rate with the expectation of making gains above this rate elsewhere. But, there are two (amongst many others) different schools of thought that are in play at the moment - the standard; equity increases signal an increase in risk appetite which leads to GBPJPY heading upwards, and the bad news = good news view; if the markets are ailing (largely due to the credit crisis in this case) the central banks are more likely to reduce interest rates to stimulate growth, and thus the equity markets receive a boost making them more attractive to investors and the perceived risk/reward ratio of the carry trade, pushing GBPJPY up. So, based on this narrow view that whatever happens in the equity markets the carry trade, at least temporarily, is back on. It seems entirely irrational to me but I guess it reveals something about investor psychology. Of course there are a multitude of factors that comprise investor psychology at any one time often with opposing effects, and it's which of these effects is the most predominant at the time of the data release that determine price.

Overall, I believe that regardless of what central banks do the credit crisis will have significant knock on effects which will eventually trickle down the markets (particularly in the US, UK and Japan) and there will be a recession of sorts. In this event the carry trade will unwind, and GBP will devalue significantly against other currencies including the Yen.

When? I don't know but it probably won't be tomorrow.

The markets don't place quite as much significance upon the NFP as they once did. Not sure why this is (conspiracy theories aside) but the preliminary figure we saw on Wed was peculiar to say the least. An increase in employment approaching the Christmas period is to be expected and should be factored into the annual cycle of expectations. The ADP figure was pretty high though (190k v 50k exp) and I suppose NFP will also exceed expectations of 75k.

Tomorrows NFP hinges on the revision.

Looks like 15 min short strategy trade is on with price below 1 hr 100 sma ,daily 5 sma and tokyo pivot lets see if it falls down to 224.30

This pair has been ranging forever come on we want some action

There is a 4-1H strategy signal now, do you think we should take it or wait until after the NFP? From yesterday's experience, reports don't affect this pair very much, they cause only temporary spikes!

I've taken a small long position. Even if I lose that would be losing in style i.e. based on a strategy!

for the bulls. a break and close above 226.20 puts us outside the channel and could see the geppy reach 226.77 (dr1) to 227.20 area (100ema, 23.6%fib) initially then futher, though i doubt it. this is all IMO. use aus' strategy systems for entry points if you are not in a position. hope this helps. please evaluate yourself and trade according to your plan[/quote]

good morning all. i must say i am surprised to see us outside this channel, glad i closed positions and banked profit (+100 total on 2 shorts) before i went to bed. looks like the 2nd scenario of my analysis played out. that is why we have to be ready to trade what we see not what we think might happen

Wow this thread is so dead. Did someone fart? I hope everyone is jumping on the long bandwagon. If you wait until after the NFP, this pair might be already at weekend gap. It's still about 200 pips away.

usd/jpy has hit resistance at 111.63, cable at 2.0332, geppy at 226.80, so since i am not in and we are a little overbought, i'm staying out for now unless i see closes above those areas. i may stay out the whole day and just watch

CADCHF made 134 pips, got it half the trade period.
NFP has always made higher pips than other economic indicators.

Nice trade
Sc.david

Sounds prudent. The break out of the channel was majorly significant yet what with it being an irregular trading day you've got to be cautious how you interpret these things. Live to fight another day.


PS. Canadian employment figures came out ahead of expectations 42k v 8k, all set for a positive NFP but careful if you trade it, Wednesday's ADP report has distorted expectations.