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Cable Update (GBPUSD)

  • #93,341
  • Oct 23, 2008 12:33am Oct 23, 2008 12:33am
Quoting Bridge
100 pip spike in 1 sec

ouch!!!
something big is covering the short position???

Sonic
  • #93,342
  • Oct 23, 2008 12:40am Oct 23, 2008 12:40am
Quoting fxdoc
20 pips spread most of the day on Saxo ...............
saxo can't hold any losses anymore.
  • #93,343
  • Edited 1:23am Oct 23, 2008 1:21am | Edited 1:23am
These investors had to sell some of their higher yielding assets to make up for the losses. Hence, deleveraging emerged in the markets. As these first investors sold these assets, their price dropped, forcing still others to sell. The credit crisis and the lockup in the credit markets was a final straw for the leveraged carry trades.
Even investors who wanted to stay in the trades could no longer secure the loans to keep these trades alive. They were forced to deleverage. This means they had to sell their investments to pay back the loans.
So which currencies benefit when a financial system goes through a deleveraging of the financial system? Answer: The Japanese yen and the U.S. dollar. Both these currencies were used to fund carry trades. The U.S. and Japan have some of the world’s largest banks, and extremely low interest rates making them the perfect funding currencies for the carry trades.
As deleveraging sweeps through the markets, investors have to buy back the yen and the dollar to pay back loans. Also, a majority of the investors participating in these trades were based in the U.S., so deleveraging meant they moved back into the U.S. dollar. U.S. investors purchased nearly US$1 trillion in foreign stocks and bonds since 2003, many of which are now being sold with the proceeds moving back to the U.S. dollar.
So the deleveraging of the global financial system certainly seems to me to be one of the primary factors propping up the U.S. dollar right now. But where will it end? These are some extraordinary times, and the markets are anything but normal.

This is what one analyst had to say in a newsletter I am subscribed to... about why the dollar is doing so good v. the GBP and EUR.

So will it be another short day for cable?
  • #93,344
  • Oct 23, 2008 1:40am Oct 23, 2008 1:40am
Do you think cable will go all the way up to R1=1.6466?
  • #93,345
  • Oct 23, 2008 1:41am Oct 23, 2008 1:41am
Quoting Jnita
These investors had to sell some of their higher yielding assets to make up for the losses. Hence, deleveraging emerged in the markets. As these first investors sold these assets, their price dropped, forcing still others to sell. The credit crisis and the lockup in the credit markets was a final straw for the leveraged carry trades.
Even investors who wanted to stay in the trades could no longer secure the loans to keep these trades alive. They were forced to deleverage. This means they had to sell their investments to pay back the loans.
So which currencies benefit when a financial system goes through a deleveraging of the financial system? Answer: The Japanese yen and the U.S. dollar. Both these currencies were used to fund carry trades. The U.S. and Japan have some of the world’s largest banks, and extremely low interest rates making them the perfect funding currencies for the carry trades.
As deleveraging sweeps through the markets, investors have to buy back the yen and the dollar to pay back loans. Also, a majority of the investors participating in these trades were based in the U.S., so deleveraging meant they moved back into the U.S. dollar. U.S. investors purchased nearly US$1 trillion in foreign stocks and bonds since 2003, many of which are now being sold with the proceeds moving back to the U.S. dollar.
So the deleveraging of the global financial system certainly seems to me to be one of the primary factors propping up the U.S. dollar right now. But where will it end? These are some extraordinary times, and the markets are anything but normal.

This is what one analyst had to say in a newsletter I am subscribed to... about why the dollar is doing so good v. the GBP and EUR.

So will it be another short day for cable?
i totally agree with that
When life gives you lemons, make lemonade
  • #93,346
  • Oct 23, 2008 1:47am Oct 23, 2008 1:47am
Hi guys....
Is this finally a reversal or just retrace before going south further ?
  • #93,347
  • Oct 23, 2008 2:11am Oct 23, 2008 2:11am
I think it's still in a consolidation phase in the range of 1.6162 - 1.6338
"It's better not to enter the market than loosing a pip"
  • #93,348
  • Oct 23, 2008 2:17am Oct 23, 2008 2:17am
Quoting Jnita
These investors had to sell some of their higher yielding assets to make up for the losses. Hence, deleveraging emerged in the markets. As these first investors sold these assets, their price dropped, forcing still others to sell. The credit crisis and the lockup in the credit markets was a final straw for the leveraged carry trades.
Even investors who wanted to stay in the trades could no longer secure the loans to keep these trades alive. They were forced to deleverage. This means they had to sell their investments to pay back the loans.
So which currencies benefit when a financial system goes through a deleveraging of the financial system? Answer: The Japanese yen and the U.S. dollar. Both these currencies were used to fund carry trades. The U.S. and Japan have some of the world’s largest banks, and extremely low interest rates making them the perfect funding currencies for the carry trades.
As deleveraging sweeps through the markets, investors have to buy back the yen and the dollar to pay back loans. Also, a majority of the investors participating in these trades were based in the U.S., so deleveraging meant they moved back into the U.S. dollar. U.S. investors purchased nearly US$1 trillion in foreign stocks and bonds since 2003, many of which are now being sold with the proceeds moving back to the U.S. dollar.
So the deleveraging of the global financial system certainly seems to me to be one of the primary factors propping up the U.S. dollar right now. But where will it end? These are some extraordinary times, and the markets are anything but normal.

This is what one analyst had to say in a newsletter I am subscribed to... about why the dollar is doing so good v. the GBP and EUR.

So will it be another short day for cable?
If that is the scenario then there should be abundance supply of usd. When there is so much supply shouldnt it suppose to be weak ?
  • #93,349
  • Edited 4:34am Oct 23, 2008 3:58am | Edited 4:34am
Chuck is spending the rest of the week at the EverBank headquarters down in Jacksonville. He sent me these thoughts to share with readers this morning:
"Here I am in Jacksonville after having a wonderful dinner with some of the great folks here. I came back to my room and checked the currencies to see that the euro had lost another two cents to the dollar.
"Ugh! As I said a couple of weeks ago, I'm raising the white flag. This is just crazy, all this dollar strength. But it is what it is, and again, I'm going to stick to my fundamentals, as they have never let me down before.
"I've told the crowds that this reminds me of 2005 so much. The dollar gained and gained, all the way to 1.18 euro. And the dollar bulls were dancing in the streets, saying the dollar's bear market had come to an end, only to find out the dollar has been propped up by the Tax Amnesty for U.S. Corporations doing business overseas. Once that Tax Amnesty ended, the dollar’s fundamentals returned to push the dollar down over the next two and a half years.
"Now, we have this financial sector meltdown pushing the dollar up once again. The worldwide demand for dollar funding is amazing and driving the dollar higher every day. It's amazing to see that everyone wants dollars to fund their capital requirements, etc.
"Let’s talk about the money supply for just a moment. I had a go with someone the other day regarding the current money supply in U.S. banks and they said that this money supply was not going to cause inflation. But I said, "the true definition of inflation is money supply increasing."
"He said, “This money supply was not going to the banks to stimulate the economy, but to shore up the bank's books.” So I said, "Well, it's still money supply, and you can't tell me that this isn't going to eventually enter into the economy and stimulate inflation."
"I went on to say, "Banks can't stay in business, or survive without making loans, so they may need to shore up their books now, but eventually, they are going to have to put that money to use! When that happens – you’re going to see inflation. Period."


In answer to your question, here is his explanation. Yes, it will eventually weaken, or so they speculate!?
  • #93,350
  • Oct 23, 2008 4:29am Oct 23, 2008 4:29am
Quoting gagakrimba
If that is the scenario then there should be abundance supply of usd. When there is so much supply shouldnt it suppose to be weak ?
Maybe the $'s weakness will be gelt next week, so set up your longs and grab you chair
  • #93,351
  • Oct 23, 2008 4:33am Oct 23, 2008 4:33am
the volatility right now is crazy. It's like a constant fight between the bears and bulls- up down up down etc.
I'm in the bear camp, I want to see 1.5500!
  • #93,352
  • Oct 23, 2008 4:52am Oct 23, 2008 4:52am
i took the loss on the hedge......exited position looks to me this hedge would only cost me bucks....interest rate cut was finishing me off....

at least now my ass is flat!
  • #93,353
  • Oct 23, 2008 5:02am Oct 23, 2008 5:02am
good decision navin, the sooner you cut losses and focus on making some wins, the better.
  • #93,354
  • Oct 23, 2008 5:06am Oct 23, 2008 5:06am
Quoting spintrader
good decision navin, the sooner you cut losses and focus on making some wins, the better.
yes i think so
i learned a lot from it.....i made money, small this month and closing the hedge consumed all the profit accumulated and took £253 and i figure best to cancel it and make my money back instead of dreaming of a success out of the hell hole i was in...

i think hedge is great only if yur with a broker who wont charge u swop fees, then it can work
  • #93,355
  • Oct 23, 2008 5:20am Oct 23, 2008 5:20am
Congrats Navin! Dont worry you will recover that loss now in no time!

Peace
  • #93,356
  • Oct 23, 2008 5:24am Oct 23, 2008 5:24am
Quoting nAVIN2007
yes i think so
i learned a lot from it.....i made money, small this month and closing the hedge consumed all the profit accumulated and took £253 and i figure best to cancel it and make my money back instead of dreaming of a success out of the hell hole i was in...

i think hedge is great only if yur with a broker who wont charge u swop fees, then it can work
Navin, You are good enogh to rebuild your profit quicker then waiting on these hedges,
I am sure
Jesus Christ is my only Lord !
  • #93,357
  • Oct 23, 2008 5:27am Oct 23, 2008 5:27am
Quoting nAVIN2007
i took the loss on the hedge......exited position looks to me this hedge would only cost me bucks....interest rate cut was finishing me off....

at least now my ass is flat!
About time Navin....that hedge was restricting your trading. It did me the same way last year!

Now look at your charts and go make some pips!! :nerd:

HOLLA
  • #93,358
  • Oct 23, 2008 5:34am Oct 23, 2008 5:34am
Quoting Maverick537
You might want to look at FX Solutions. Spreads are constant. The only down fall that I would see most traders having is they do not use MT, they have their own charting, pretty good one though.
Dear Maverick,

Along this universe of brokers...independently of all issues, still I prefer to trust () in Oanda, FXCM and the Nº1 for me...Deustche Bank (dbfx)...

...but, thank you for your suggestion!
  • #93,359
  • Oct 23, 2008 5:34am Oct 23, 2008 5:34am
Quoting nAVIN2007
i took the loss on the hedge......exited position looks to me this hedge would only cost me bucks....interest rate cut was finishing me off....

at least now my ass is flat!
LOL story of the week
When life gives you lemons, make lemonade
  • #93,360
  • Oct 23, 2008 5:37am Oct 23, 2008 5:37am
thanks guys....definately it really was restricting my trading....but i dont regret it at all i learned a lot....i considered it like like i got robbed on the train .....just kidding

like i went to trading siminar and got conned there..
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