Cable Update (GBPUSD)

Darn it, my FF had reset itself to EST instead of EDT....hence showed 3:30.

UK Visual TRade BAlance in at -67.9 Bn vs - 64 Bn expected....so negative for cable - but will that be sufficient for a move towards 9700?

First support is the 745 area then 725.

For all you experienced traders.....Is it possible for GU to go down and GJ to go up at the same time? Or, are they normally correlated for the most part?

[CABLE] fell initially after another trade report shocker. The global deficit boomed out again in Feb to Gbp 6.791bln.

Contacts now suggest opening sell orders will be lowered into the 1.9770/80 area. Note the Pound received more fresh negative news earlier, with FT's Lex suggesting "Pound buyers are too optimistic on the Treasury move" and a private equity group have pulled out of a possible Sainsbury's Gbp 10bln buyout.

Thus, we could see even greater downside through the session, with sub-1.9740 stops on the horizon. However, we reiterate the 1.9700/20 region could well attract greater medium-term account demand, and we would be better dip buyers, given house prices and another possible BOE hike is still the major focus here.

From my EW comments earlier, I´m now working with the larger ABC retracement...A = 9724; B in just before the London Open = 9790 right in the target range, thus giving Wave C targets of 9719 / 700 / 679. I´m viewing this as a counter trend trade and sold half a position, looking to close in the target areas and buy again.
The hourly 200 EMA is now flat at 9721, so I´m going to watch the action down - perhaps the pull back will continue towards the US open and that´ll set up the buy. Just my opinion.

Nice one! i like the sound of that.

GBP/USD is now 1.9743, I'm afraid to go long targeting 1.9820, since it might go down to 1.9710 after all these kicks from negative UK data

I´m tied up at present and as I dont look at the 4 hour much during the week I´ll have to update it later

http://www.forexfactory.com/images/icons/icon7.gif

MUSIC for GBP longs, arent they?

Still holding the short with a buy limit @ 1.9705

In more detail, the [BCC"S Q1 QES] shows the [UK] manuf sector easing off somewhat with investment in plant and machinery slowing on the quarter (to 18 from 23), though profitability was up (to 40 from 37).

The number of firms at full capacity also rose to 41 from 36 and pay settlements increased to 32 from 30. On the services side, the employment outlook improved significantly with the balance for the next 3 months rising to 28 from 22.
Investment balances were also higher on the quarter with the number of firms at full capacity rising to 42 from 40. The BoE/MPC is likely to take the breakdown of this survey on board, not least due to its detail on both sectors.

Another 25 bp rate hike in May still looks likely indeed (Bank rate up to 5.5%).

The [USD INDEX] looks to have made a clear break below previous support around 82.60/65. These lower levels come despite the Fed announcing in its March minutes that there is agreement "further policy firming" may be needed to foster lower US inflation. Into the US data to come, i.e. import/export prices and initial claims (see for forecast), the downside is clearly the focus. We suggest keeping an eye on the 82.38/40 and 82.24/25 zone, with breaks below likely to inspire a fresh wave of broad Usd sales. Initial resistance comes in at 82.70/75 and 82.85/90.

Monthly chart follows:

DJ MARKET TALK: Talk Of Cable Stops Above 1.98- Trader

Thu Apr 12 06:24:32 2007
EDT

1024 GMT [Dow Jones] UK bank trader hearing talk of cable stops above 1.98.
He says for now they look safe with the rate stuck around 1.9750, perhaps a
more-hawkish-than-expected Trichet press conference will change that. Cable now
at 1.9757.

AP
China's Foreign Reserves Rise Past $1.2T
Thursday April 12, 6:23 am ET
By Joe Mcdonald, AP Business Writer
China's Foreign Reserves Rise Past $1.2 Trillion, an Increase of 37.4 Percent Over Last Year


From Yahoo! Finance news.

This is pure Bull... how far will it go?

I hope till 9815 for the moment.

After that... 2.000 maybe ?!?

10:42This is a stop driven market we are facing now, and there is some confusion about rate hikes in may. The article is referencing australia for a May hike, the market is possibly thinking ECB

Pound is refusing to pull back. Any thoughts for tomorrow's PPI, trade balance, consumer sentiment action????

As requested, my 4 hour chart.
From what I see on this chart, I think we have an exhausted bull that needs some more food ( good news) to help it break above the 9814 / 9821 area soon - this could be a helping push from the Euro which is making new two year highs and has now hit 1.3500 - or tomorrows data.
If this doesnt come today or tomorrow, then we could see a pull back next week before another attempt on these highs.
Either way, the main trend is still up.
For me, EW in corrections offers too many options and I prefer not to use it and work with normal fibo retracements....there are sufficient of those to work with.

11:20GBP/USD having trouble above 1.98...We do think however a clearance of 1.9810-20 would be significant

The bear are slamming bull big time right now!But the bull still want to kick some a**!! Dont be greedy!Remember that.