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Cable Update (GBPUSD)

  • #145,381
  • Jul 12, 2009 8:16am Jul 12, 2009 8:16am
While it's quiet, I wonder if I may pose a question.

I have wondered over the past year since I've been trading, why the pound has the strength that it does, especially in comparison to say the Euro or the dollar.

I see the Euro/dollar correlation perhaps, countries like Germany and Austria are strong in production, but not the pound.
Compared to North America the British housing market is overpriced. It almost appears to be some bubble that could easily break at some point.
The rate of inflation seems almost unbelievable .
http://www.statistics.gov.uk/cci/nugget.asp?ID=19

I remember back in May thinking the same thing when it was 1.50 and here we are now above 1.60. This is one of the reasons I stopped trading the pound and switched to the Euro.
I'm not sure who here is into fundamentals, but it's a question I would really appreciate an answer to.

Thanks!
  • #145,382
  • Jul 12, 2009 8:36am Jul 12, 2009 8:36am
Quoting kimd
While it's quiet, I wonder if I may pose a question.

I have wondered over the past year since I've been trading, why the pound has the strength that it does, especially in comparison to say the Euro or the dollar.

I see the Euro/dollar correlation perhaps, countries like Germany and Austria are strong in production, but not the pound.
Compared to North America the British housing market is overpriced. It almost appears to be some bubble that could easily break at some point.
The rate of inflation seems almost unbelievable .
http://www.statistics.gov.uk/cci/nugget.asp?ID=19...

Yep its a mystery to me too and I live there.

Re housing - I think it is being supported by the severe lack of supply and a growing population.

The market may be pricing in the next government(probly Conservative) which should be good for the economy??.

High inflation means the bank are more likely to increase rates rather than decrease.

Also I think I read somewhere that economists think the Uk will come out of the recession before EU.

I'm also reluctant to trade the pound - I think it should tank but it keeps going up and theres no way I can bring myself to buy it.
  • #145,383
  • Jul 12, 2009 8:53am Jul 12, 2009 8:53am
Why not use a 50 pip stop and then buy. Are you saying in an uptrend you would not buy it at all??

Quoting stewrigh
Yep its a mystery to me too and I live there.

Re housing - I think it is being supported by the severe lack of supply and a growing population.

The market may be pricing in the next government(probly Conservative) which should be good for the economy??.

High inflation means the bank are more likely to increase rates...
Its all in the mind.
  • #145,384
  • Jul 12, 2009 8:54am Jul 12, 2009 8:54am
Quoting Yngwie
From my simple analysis, i will say GU will be in downtrend when market is opened. The highest it can go is 1.6322 (100pips). If the price breaks the said price, it may change the trend for 1H and 4H chart.
Do or die! I'm ready for short with [email protected]
Live trade ~ GBPUSD only. No chart! Follow at your own risk!
  • #145,385
  • Jul 12, 2009 8:55am Jul 12, 2009 8:55am
imho, a good part of GBP strenght could come from its lack of liquidity (compared to EUR and USD) which makes it easier for some big players to corner the market (remember Soros?). Sometime, there are also quite a bit of M&A going on behind the scene in favor of GBP.
In Canada, we also had a similar situation last year when the loonie was pushed to outrageous height vs the USD only to snap back when the specs have achieved their arbitrary "target".
  • #145,386
  • Jul 12, 2009 9:03am Jul 12, 2009 9:03am
yes, I am in Canada too and remember that with few fond memories

I trade the usd/cad as well, very volatile at times, but nothing like the pound.

Even with a 50 pip sl I can't do it , just doesn't make any sense and if I can't wrap my brain around it, I'd much rather stay out.

Thanks all for your insight.


Kim
  • #145,387
  • Jul 12, 2009 9:04am Jul 12, 2009 9:04am
Quoting 5abi
Why not use a 50 pip stop and then buy. Are you saying in an uptrend you would not buy it at all??

No its a psych thing I just can't buy it even if I get a buy sig.

The pound should be tanking so I just try and sell the peaks.

But thats one of my probs - I just can't ignore my bias sometimes.
  • #145,388
  • Jul 12, 2009 9:10am Jul 12, 2009 9:10am
Well, I understand the bias part. But it is also hard to miss a 2600 pip uptrend! As a simple filter-use a 200 MA something to gauge the trend on H4.
It is a good way I have found to get rid of the my bias.


Quoting stewrigh
No its a psych thing I just can't buy it even if I get a buy sig.

The pound should be tanking so I just try and sell the peaks.

But thats one of my probs - I just can't ignore my bias sometimes.
Its all in the mind.
  • #145,389
  • Jul 12, 2009 10:10am Jul 12, 2009 10:10am
Quoting stewrigh
No its a psych thing I just can't buy it even if I get a buy sig.

The pound should be tanking so I just try and sell the peaks.

But thats one of my probs - I just can't ignore my bias sometimes.
thats a problem u have to overcome...forget what should be happening remember momentum trade. looking at the 4hr time frame a higher high was made...the trend is still intact...a lot depends in the weekly close but i fancy it moving up..

good luck buddy
  • #145,390
  • Jul 12, 2009 11:01am Jul 12, 2009 11:01am
for those who hold shorts, a nasty surprise may occur- http://www.bloomberg.com/apps/news?p...d=aXQT1NGik0a0
Its all in the mind.
  • #145,391
  • Jul 12, 2009 11:09am Jul 12, 2009 11:09am
Quoting 5abi
for those who hold shorts, a nasty surprise may occur- http://www.bloomberg.com/apps/news?p...d=aXQT1NGik0a0

hopefully up according to the bloomberg statement.. i've hold for long..
  • #145,392
  • Jul 12, 2009 11:11am Jul 12, 2009 11:11am
Quoting nAVIN2007
thats a problem u have to overcome...forget what should be happening remember momentum trade. looking at the 4hr time frame a higher high was made...the trend is still intact...a lot depends in the weekly close but i fancy it moving up..

good luck buddy

not sure what you are seeing on a 4 hour ... I have a down trend with a lower high and a break down of the triangle at the 1.6600 level.

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  • #145,393
  • Jul 12, 2009 11:14am Jul 12, 2009 11:14am
as long as u have a t/p at 6400 you will hit it this week. cannot see any more upside atm. 6400 and then we see from there.

Quoting mj_xr
hopefully up according to the bloomberg statement.. i've hold for long..
Its all in the mind.
  • #145,394
  • Jul 12, 2009 11:17am Jul 12, 2009 11:17am
Quoting 5abi
for those who hold shorts, a nasty surprise may occur- http://www.bloomberg.com/apps/news?p...d=aXQT1NGik0a0
read that report carefully ......

gas prices part of report .. these have gone up in June due to higher gas prices
shopper changed shopping habits to shop at discount stores looking for bargains .. does not sound like an affluent economy. Bargain hunting was used.

and probability was used.

I would pay not attention to that news item for now .. they are grasping

and hold on wasn't last month .5 % ...isn't that less than last month with increased gas prices .... does not take a brain surgeon to work that one out. If the gas prices prices remained same as May we would likely see .3% only
Blogging daily now at www.volume.zone
  • #145,395
  • Jul 12, 2009 11:22am Jul 12, 2009 11:22am
im short looking for 1.6 i see that hitting but i speak for my self...


any thoughts?
  • #145,396
  • Jul 12, 2009 11:24am Jul 12, 2009 11:24am
I read that. But this is a survey. I am not giving it too much weight, but people are looking at it, and if the numbers come out to support this, the immediate reaction will be like a wildfire--traders shoot first, and think later-so any signs of retail sale going up will mean USD getting weaker-ofcourse they will slice and dice it later for analysis that peeps are buy at walmart and not at Macys but trust me damage would have been done in first 2 hours and a fast trader would have got out with his share of pips.

Mark it- Retail sale will be up, I mean nitty gritty indicators are going to be up bud, it is summer, it is 4th of july, people are ususally happy and they spend when they are happy and sun is shining

Your long term projection is correct but I am just looking at this week and no more. This is what I do.



Quoting malcolmb14
read that report carefully ......

gas prices part of report .. these have gone up in June due to higher gas prices
shopper changed shopping habits to shop at discount stores looking for bargains .. does not sound like an affluent economy. Bargain hunting was used.

and probability was used.

I would pay not attention to that news item for now .. they are grasping
Its all in the mind.
  • #145,397
  • Jul 12, 2009 11:31am Jul 12, 2009 11:31am
Quoting 5abi
for those who hold shorts, a nasty surprise may occur- http://www.bloomberg.com/apps/news?p...d=aXQT1NGik0a0
Can u explain what can boost pound? In fact there is no news for pound can boost up when market is opened. Sorry, i didnt understand the article
Live trade ~ GBPUSD only. No chart! Follow at your own risk!
  • #145,398
  • Jul 12, 2009 11:33am Jul 12, 2009 11:33am
Risk Tolerance.

Risk Tolerance usually boosts currencies against USD. Infact news may have nothing to do with the Pound but it will bounce up on speculation that US recession is ending.

Hope that makes sense.

Quoting Yngwie
Can u explain what can boost pound? In fact there is no news for pound can boost up when market is opened. Sorry, i didnt understand the article
Its all in the mind.
  • #145,399
  • Jul 12, 2009 11:41am Jul 12, 2009 11:41am
Quoting 5abi
I read that. But this is a survey. I am not giving it too much weight, but people are looking at it, and if the numbers come out to support this, the immediate reaction will be like a wildfire--traders shoot first, and think later-so any signs of retail sale going up will mean USD getting weaker-ofcourse they will slice and dice it later for analysis that peeps are buy at walmart and not at Macys but trust me damage would have been done in first 2 hours and a fast trader would have got out with his share of pips.

Mark it- Retail sale will be up,...
0.4 % is less than .5% last month that is down not up ....

also if you like reading these bs news items .. check this one out ...
http://www.bloomberg.com/apps/news?p...d=a00_1SlKgIwo

30 weeks to find a job in the US .... and that is a computer pro. Highest long term unemployment since records began in 1948 !!! and since Great depression

retail figures may well be up ... aka the love of the credit card.

Ask how many of your family and friends are using credit card / home equity debt to finance their day to day spending habits.

I earn a lot of money and friends who earn half of what I do , with more housing ./ car expenditures go on 3-4 trips per year , eat out every weekend etc etc (I do not do this ) , when I asked how they did they said debt ...now add 12% unemployment to that , and liekly wages cuts if the economy gets any worse and see how many have to claim bankruptcy . I have 4 friends right now in Canada going through that .

as i mentioned before the great depression had three legs ... down ... up and then the worst one .

I see Dj hitting 4000 within 1.5 years and then forming some kind of W shapes over the next 18 months and then the next bull cycle will commence.

However US is following the same model Japan did way back ...they are still trying to recover ..and NIkkei is still down 80% of its highs several years ago . and housing 50 to 80% down still all these years later
Blogging daily now at www.volume.zone
  • #145,400
  • Jul 12, 2009 12:00pm Jul 12, 2009 12:00pm
Found this article:

Medvedev Shows Off Sample Coin of New "World Currency" at G-8 - By Lyubov Pronina (12/7/09) http://futurefastforward.com/templat...pdf_button.png http://futurefastforward.com/templat...rintButton.png http://futurefastforward.com/templat...mailButton.png By Lyubov Pronina Saturday, 11 July 2009 21:00

Bloomberg

Russian President Dmitry Medvedev illustrated his call for a supranational currency to replace the dollar by pulling from his pocket a sample coin of a “united future world currency.”

“Here it is,” Medvedev told reporters today in L’Aquila, Italy, after a summit of the Group of Eight nations. “You can see it and touch it.”


The coin, which bears the words “unity in diversity,” was minted in Belgium and presented to the heads of G-8 delegations, Medvedev said.

The question of a supranational currency “concerns everyone now, even the mints,” Medvedev said. The test coin “means they’re getting ready. I think it’s a good sign that we understand how interdependent we are.”

Medvedev has repeatedly called for creating a mix of regional reserve currencies as part of the drive to address the global financial crisis, while questioning the U.S. dollar’s future as a global reserve currency. Russia’s proposals for the G-20 meeting in London in April included the creation of a supranational currency.


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