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

GBP/JPY is destined to go higher in the short term, higher than 160.5 and you will see a divergence in most indiactors...

Shorting at these levels is against the trend beware.......

You will see a big drop once this upmove is complete, wait for the divergence to play out before you sell..... once you sell hold on a for a big ride down to around 120......


--Andy

Gu I have been trading this week intraday .

What I do is sell rallies on a 15 min chart . I am hoping that GU will move up to test 1.6000 one more time on low volume ( that is about the high volume pivot of 8 days ago ) . Down side targets for Monday is 1.5855. If this breaks we see 1.5500 zone.


as long as 60 min stays under the 50 sma ( brown moving average) then sell rallies on 15 min is way to go . If you get 200 pip in one session , take half off and set stop to BE other half and let it ride down .

I am not very good at swing trading as i get anxious when i have a trade on for a long period ...... so my goal is 50 to 100 pips in gj and 50 - 200 pips gj in a day.

chart please to see those bullish divergences.... my daily rsx show down move is to continue .. weekly has bearish div , 4 hour the rsx is under 50 heading up BUT daily candles have lower highs and lower lows.

Thanks Malcolm for the Chart and the explanation of how to utilize it correctly.

I am seeing at the moment a Gap on Gbp/JPY. But of Coarse by the time the Market opens, this can all Change. I will be utilizing the RSX indicator this week on my charts. Thanks again.

http://forex.tradingcharts.com/quote...ish_pound.html

I see what you're saying Malc, when you swing trade you have to take into account retraces and whatnot. I've been short GU for a bit now and on my weekly, which I took the trade off, I see 1.58 next and then 1.51 so we'll see. The close below 1.60 was extra bearish in my book. Wouldn't be surprised to see it open in around 1.5950/1.5900

live charts and tenfore both show 157.60 still

Jun 06, 2009 (DailyFX via COMTEX) -- Up until the second half of this past week, the British pound was enjoying a steady and aggressive rally against its US counterpart. However, a 22 percent rally in as few as three months with fundamentals like the United Kingdom's is clearly a reason to be skeptical.

British Pound at the Mercy of Risk Appetite as Fundamentals Crumble

Fundamental Outlook for British Pound: Bearish

- Bank of England keeps rates unchanged at 0.25% and quantitative easing bill at 125 billion pounds - Consumer confidence, manufacturing activity and mortgage approvals hit their highest levels this year - Is GBPUSD's plunge a temporary reversal or trend revival? Get the technical read on price action.

Up until the second half of this past week, the British pound was enjoying a steady and aggressive rally against its US counterpart. However, a 22 percent rally in as few as three months with fundamentals like the United Kingdom's is clearly a reason to be skeptical. The nearly 700-point drop over the final three days of the trading week is far from confirmation of a trend reversal; but it should be enough of a jolt to remind market participants that Europe's largest economy is pacing the global recession and financial conditions are balanced on a knife's edge. Looking ahead to next week, there is likely to be short-term volatility from scheduled economic releases and a close eye kept on the stability of the government's upper echelons; but sterling traders' real guide will be risk appetite.

How is it that the currency of an economy that is expected to suffer the worst economic contraction in the industrialized world, has ongoing troubles with credit and financial conditions, and is now seeing political turmoil has been able to produce such an impressive rally across the board? There is the argument that the currency was oversold and that the fundamental outlook for the UK has perhaps reached an equilibrium with its major counterparts. However, this is a fundamental consideration that would take considerable time to develop. The only way a currency as fundamentally depressed as the sterling would be able to appreciate so rapidly is through a sharp turn in global growth and financial condition forecasts. The appetite for capital appreciation is fulfilled through speculation that the currency was oversold. Fundamental forecasts improve as the aggressive steps policy officials took to revive the economy would help leverage the ensuing recovery. And, yield forecasts are massaged as the MPC would be expected to reign in their quantitative easing and immediately concentrate on inflation. Is it reasonable to project such an aggressive turn in sentiment and the particular influence it should have on the pound? We seen signs around the global that the pace of recession is letting up; but that is not the same thing as a return to positive growth. To maintain a rally an advance in risk appetite, we need irrefutable evidence of a near-term economic recovery. Otherwise, speculative capital is merely building a bubble that prevailing levels of risk and return cannot support

Closer to home, sterling traders will have to concern themselves with key data releases and politics. The latter subject has hit a fever pitch over the past few weeks. While the public has long held the government responsible for the economy's current economic woes (or at least its severity), the tumult has not reached the level where resignation has been considered - until now. Local elections have shown an irrefutable lack of confidence in sitting members and Prime Minister Gordon Brown has been forced to shuffle his cabinet. However, market participants are concerned primarily with the major players in the economic crisis - the PM himself and Chancellor of the Exchequer - whose absence could derail the progress that has been made to this point. To gauge the market's sensitivity to such a possibility, we merely need to see the sharp drop in the pound when rumor (which had to be officially dismissed by the government) that Brown would soon announce his resignation. As for data, the docket is thin but potent. Consumer spending will be measured through the BRC's retail sales for May. Though expectations are low. For factory activity, the plunge in industrial production has eased significantly through first quarter; but we are still waiting on the first positive reading in 14 months. Housing price indicators and trade figures will round out the picture with indirect appraisals of credit availability and foreign demand. -

When financial markets were on the way down, risk aversion reigned and every investment that was deemed risky crashed. The U.S. dollar and 10-year Treasuries did well as global investors fled to safety.

But for the last three months this trade has been in retracement mode. And the further it has retraced, the more it has fueled optimism in the outlook for a recovery.

Stocks have been rising. Foreign currencies have climbed. Even commodities finally showed some life, and when they did ... they bounced strongly. As a result, the U.S. dollar and 10-year Treasuries have been sold.

Wednesday, though, was a key day in the financial markets.

That day may have marked ...

The Top in This Aggressive Retracement Period —
At Least For the British Pound ...

Just last year the pound was soaring to all-time highs against the dollar. And UK residents were enjoying their buying power in the States ... snapping up U.S. real estate and traveling for shopping sprees in places like New York City.

However, when the financial crisis hit the U.S., it was quickly found that the UK was just as exposed, if not more so. And when it was finally determined that many countries were not "decoupled" from the U.S., but were in fact highly interconnected, the pound and other currencies came tumbling



The chart above shows the severity of the pound's crash. Six years of strength in the pound (versus the dollar) was given back in 14 short months!

But in the last three months the pound has aggressively regained 23 percent of this fall.

As this retracement trade across risky assets turned into a recovery theme for the markets, the policy actions in the UK coincided nicely, beginning to show some effects and glimpses of economic improvement.

Nevertheless, in the face of this strength, the pound has been dealt two harsh blows ...

Two weeks ago Standard and Poors downgraded the outlook of the UK's AAA credit rating. Yet the pound proceeded to rally over 7 percent in the following weeks.

Then a political scandal struck when members of Prime Minister Gordon Brown's cabinet were exposed for personal spending jaunts with taxpayer money. Yet the pound continued to rally.

Why?

It had very little to do with specific interest in the pound. But it had everything to do with the across-the-board retracement of the collapse in risky assets that took place from mid-2008 to March 2009.


Risk Aversion Trade —
Round #2

This week, the wholesale retracement in financial markets reached some very significant inflection points ...

The U.S. stock market, which has led this retracement, steadily climbed higher and higher and fed into an optimism that has fed back into the stock market. And when the stock market rises and optimism rises, so does confidence about the economic outlook. And voila, we have green shoots.

But in all likelihood, this feel-good rally has run its course. The U.S. stock market has climbed 42 percent in 13 weeks. What's more, it has now reached its 200-day moving average AND significant long-term technical resistance.


On Wednesday, a key reversal signal flashed. Now the pound is feeling the heat.
When confidence is being manufactured by a rising stock market in simple retracement mode during the worst economic period since the Great Depression ... look out below!

If there is one glaring characteristic of this financial market environment, it's the tight relationship that has developed between markets in global crisis mode.

In other words, when the U.S. stock market runs into a wall, so will practically everything else. You could see this very clearly on Wednesday when sharp sell-offs took place in currencies, commodities and stocks all at the same time.

For currencies, when this rally subsides the biggest gainers are likely to experience the sharpest declines. As for the pound, it's already feeling the heat.

For reference... here is chart from candle stick thread..

Hello dear traders,

I hope you have traded well, I`am back from london, and I have good news for the british pound. Against a basket of other currencys, it will perform very good

I think most importend is, where a pattern appears. So this daily hammer should not be ignored.

If this hammer will fail, pound will fall deep and i would be on the wrong side of the trade
Attached Thumbnailshttp://www.forexfactory.com/attachme...1&d=1244394495 http://www.forexfactory.com/attachme...1&d=1244394495

OK .. We have a 80pip Gap.. so far

And the spread is Crazy.??

I am buying.. TP .159.32

gu gap down ... weak as gap is in direction of trend

waiting for tokyo to see what happens

am looking at a retest of 160area or higher b/4 we tank down..here is the earlier post and charts.. http://www.forexfactory.com/showpost...postcount=1244

very crazy indeed

think we head down , as long as 158 holds on 60 and 15 min we are in down channel with base channel 155

157,17 was point of control at end of day Friday. 156.50 was vwap and 155.52 lower values area . If daily is to continue lower highs and lower lows we should test 154.5 today at some point

Shouldn't we close the gap before heading down?

got my eyes on the pound too M. Sounds like a good strategy. I was just going to play a break of last weeks low, but a sell off 160 sounds like a better entry. Thanks again.

what gap . gaps are only caused by MT4 brokers coming on line after the main interbank feeds have opened

Look at the 5 min chart here ...there is no gap. This is esignal 300 feed data source and has been open since 1 pm EST today

is this a head and shoulder on 5 min.. also evening star.???

LONG now at BE

What do you mean by long at BE?

OK .. We have a 80pip Gap.. so far

And the spread is Crazy.??

I am buying.. TP .159.32

BE= Break even

This post an Hour ago..