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

This post is to solicit opinions of more seasoned traders... I, as most of us on this site, have been short. But there are a number of risk events approaching:

- UK elections tomorrow
- NFP on Friday (are Census jobs included?...)
- Japan coming back tonight

I have been scaling down on my shorts (closing positions). I would like to re-enter once the picture and PA become more clear. I may be doing quick (tight SL) trades in Asia / Europe tonight. What's your opinion? Thanks in advance for taking the time to share your view!

Yep, you nailed the text! Mr. Partridge knew what he was talking about.

And yes, the last couple weeks have been ranging but I feel we've finally broken out of that and found the line of least resistance That's why I'm staying pat and holding on to my position... not getting tempted to put it on at better prices in anticipation of some small correction. I've made that mistake before and let me tell you... the feeling of watching price move in the direction you had a position only to sit and watch while now flat is a terrible one.

for us? against who?

My quick opinions:

(1) Crap-shoot... but overall, I feel this will be a non-event (although a few here will jump all over me for that and scream for their 1,000 pip rally). Once people realize that the problems in the UK aren't going to be solved overnight and rally will be capped and it will happen quickly. However, should the conservatives lose out and fear that nothing will be done for the UK's debt immediately, fear will most definitely take over and we'll most likely see a pretty quick plunge that helps define the current bearish bias.

(2) Non-event as usual. You will find me many times calling NFP as a USD based figure... it is. What that generally means for GBP/JPY and is a tug of war type action between GBP/USD and USD/JPY. Sure there may be some movement one way or the other, but within the hour (usually less) things simmer back to what they were doing and resume whatever trend we were in. Don't expect any kind of trend change with this.

(3) If anything I think Japan coming back tonight would help the bears. I don't see them buying up the yen crosses. If anything they'll be trying to catch up with current price action.

Again, all just my opinions... others most likely have better ones.

I think gbp/jpy will go down max 141.80 and then thei will go up 145.50

read my post again.

we ARE in downtrend, and we will stay in downtrend UNTIL we get a daily close ABOVE last weekly close - whenever that may be. for this week, last weekly close = 143.25... but for next week, who knows.

USD/JPY is barly clinging to the 94 handle...

maybe i will be alone see this chart differently... im still believing it will hit 143.4 before it falls or rise futher... the reason is bcoz of ema 10. thats all... trade with ur own chart

but what about ema 17??? can't forget about that one!

ema 17 is no good, it's a prime number. You want either ema13 or 21 as it's a Fibonacci number. Haven't a clue if it's better, but it surely sounds posher!

My weekly close is 143.66
Why such a big difference ? what is ur broker time of closing?

... love it!

Many possible triggers for wider euro debt crisis

Brian Love, European Economics Correspondent - Analysis
PARIS
Wed May 5, 2010 1:03pm EDT


PARIS (Reuters) - Europe may be months, conceivably weeks away from an expanded debt crisis that cuts more countries off from access to the markets and forces fresh emergency action by rich governments or the European Central Bank.

Deals
The many potential triggers for an expanded crisis include a failed bond auction, any signs that Athens or donor nations were backing away from a 110 billion euro ($141 billion) bailout of Greece, and a freezing up of Europe's interbank money market.

For now, Portugal, Ireland and Spain, widely seen as the next possible "dominos" after Greece, remain in significantly better shape. The interbank market is far from grinding to a halt as it did after Lehman Brothers collapsed in late 2008.

But the spread of investor jitters in the past 24 hours, affecting markets as distant as yen swaps in Tokyo, suggests market conditions could deteriorate as rapidly as they did during the global financial crisis of 2007-2009.

"In my view there is a 10-20 percent chance that at least one more country will need rescuing as it finds itself shut out of the markets," said Marco Annunziata, chief economist at Italy's UniCredit bank.

"If it happens, it is most likely to happen in the coming six months."
Lena Komileva, head of G7 market economics at money broker Tullett Prebon, said the crisis over Greece's solvency had morphed into a capital markets crisis, and the markets had begun to feed on their own momentum.

"Another credit event similar to Greece can happen within weeks," she said.

German Chancellor Angela Merkel and top economic policy makers in the euro zone appeared to recognize this in their warnings about the risk of an expanded crisis on Wednesday.

"It's absolutely essential to contain the bushfire in Greece so that it will not become a forest fire and a threat to financial stability for the European Union and its economy as a whole," said European Monetary Affairs Commissioner Olli Rehn.

TRIGGERS

Greece became unable to finance its debt at affordable rates when its 10-year government bond yield soared near 10 percent in April. The euro zone's other weak countries have not reached that stage; Portugal's yield was below 6 percent on Wednesday.

Portugal sold 500 million euros in six-month Treasury bills on Wednesday at a yield of 2.955 percent, which was about four times the rate at the last such sale on March 3 but was well below maximum levels in the secondary market. This was seen as a moderately positive sign by analysts.

Spain is expected to succeed in selling 2-3 billion euros of government bonds on Thursday, although at a much higher yield than in its last auction, analysts said.

Nevertheless, every debt sale by weak euro zone states in coming months is likely to be viewed as a potential flashpoint for an expanded crisis. Portugal plans to offer more T-bills on May 19 and Spain plans another bond sale on May 20.

Annunziata estimated Spain's bond spreads were still low enough for it to borrow at current rates for at least a year or more without doing serious damage to its finances. Portugal can keep borrowing at current rates for at least a year, he said.

But he added, "The problem, as for exchange rates, is also the speed of the movement. If spreads keep widening then markets could more quickly lose confidence and the problem would be the quantity of available financing, not the cost."

Meanwhile, the Greek bailout package announced this week imposes such harsh austerity measures on Greece that the markets will continue doubting the country's political will and economic ability to stick to the package.

Any sign that the government of Prime Minister George Papandreou was backing off from key fiscal reforms in the face of public opposition could raise the prospect of a Greek debt restructuring or default, triggering an expanded crisis.

The European Commission and the International Monetary Fund will monitor Greece's progress every quarter and link aid disbursements to those reviews. The reviews could become triggers for an expanded crisis if Germany, where public opinion strongly opposes helping Greece, decides Athens is not meeting aid conditions and balks at a disbursement.
The markets could also panic if commercial banks around Europe, which have cut off funding lines to Greek banks, decide to do the same to banks in Portugal, Ireland and Spain.

So far the stresses in the money markets do not approach those seen at the peak of the global crisis. The two-year euro zone swap spread, which measures the aversion of lenders to deal with any but the most creditworthy borrowers, has widened to 65 basis points, its widest since mid-March 2009, but is far below the record 130 bps hit in October 2008.
However, large Spanish and Portuguese banks are having to pay a higher price to access the interbank market, and this premium could widen if sovereign debt markets sink further.

EMERGENCY STEPS

The political difficulty of assembling an international bailout for a country -- the Greek bailout was preceded by months of wrangling between angry governments -- suggest the ECB would be the first institution to respond to an expanded crisis.

It could reintroduce emergency measures taken during the global crisis, resuming a programme of lending in dollars and Swiss francs over six- and 12-month maturities, or extending its promise to lend banks all the weekly funds they need at fixed rates beyond mid-October.

It might also abandon minimum credit rating requirements for more countries' sovereign bonds when they are used as collateral in its money market operations, as it did for Greece this week.

Its most radical step would be to buy countries' bonds from the secondary market, shouldering their debt -- though that would be hugely controversial and hurt the ECB's reputation for conservative monetary policy. Analysts think it might pledge some 200 billion euros in such purchases.

"They've a huge amount of armoury at their disposal. They can do a huge amount of things and I think they will be able to stabilize the market at some point," said UBS chief European economist Stephane Deo.
An expanded crisis could also prompt a fresh bailout effort by rich euro zone governments desperate to preserve confidence in their currency and protect their banks from defaults. Analysts estimate a bailout of Portugal, Ireland and Spain might cost around 400 billion euros.

But the political difficulties of agreeing on an expanded bailout could dwarf the challenge which Greece posed. The European Commission is to propose a permanent mechanism for handling such crises on May 12, possibly drawing on a German proposal for a European Monetary Fund. But actually creating the mechanism might require contentious changes to the European Union Treaty that would require many months.

Regardless of how Europe resolved an expanded debt crisis, the reputation of its key economic institutions, which failed to act quickly and decisively to address Greece's troubles, would likely suffer lasting damage among investors.

Stephen Jen, managing director of macroeconomics and currencies at BlueGold Capital, said Portugal would probably also need emergency aid from the EU and the IMF.

"This short-term fix could have serious negative... consequences for Europe, the IMF, the ECB and the euro," he said, predicting both Greece and Portugal would likely reschedule their debts eventually.

"I maintain my view that there will be no happy ending for Greece."

http://www.reuters.com/article/idUSTRE6444DM20100505

UK Elections Summary Outlook: Thursday sees Britons vote in national elections and polls continue to point to a hung parliament (no party has an outright majority) as the most likely result. Polls close at 10 p.m. local UK time (1700EDT/2100GMT), so results should only be available from early Asian trading on Friday. More likely, close contests in some districts are likely to delay a clear outcome until the Asian afternoon. Should the Conservative party capture an outright majority, GBP is most likely to strengthen on the prospect of more immediate fiscal consolidation (i.e. deficit reduction). In the event no party captures a majority, coalition negotiations will commence, with the party garnering the most seats typically given first shot at forming a government. The permutations are too many to go into here, but overall we think GBP is most likely to rally against the USD and EUR (lower EUR/GBP) once the elections are past, as the fallout from the European debt crisis compels the next government to undertake a deficit reduction plan within about a month. The major risk to this view is that coalition talks drag out beyond mid-week next week and markets begin to waver on policy paralysis.

ECB Summary Outlook: At 0745EDT/1145GMT tomorrow the ECB is widely expected to announce a steady 1.00% interest rate decision. The real event, however, will be the 0830EDT/1230GMT press conference with ECB Pres. Trichet. The Euro and peripheral EMU nations' debt have come under intense pressure in recent days as concerns mount over an eventual sovereign debt default or further credit erosion. Trichet and the ECB will be focused on damage control, at the minimum voicing strong support for the EUR and downplaying contagion fears. If that is all he offers, though, the market will likely not be convinced and may soon return to selling EUR and peripheral (Greece, Portugal, Spain, Ireland) European debt. On the other hand, if Trichet announces renewed emergency liquidity operations (e.g. re-starting unlimited lending to Eurozone banks or extending eligibility of government debt as ECB collateral to all EMU countries), the immediate credit concerns may fade and the EUR might recover. The sledgehammer in this regard would be if the ECB indicated it was prepared to buy EMU government debt in the secondary markets. However, such operations effectively amount to a form of quantitative easing (i.e. printing money) and ultimately undermine the value of the EUR. The ECB is stuck between a rock and a hard place and it seems only a matter of time before the EUR weakens further. The major risk to this view is that Trichet would announce a policy of market intervention to stem EUR declines, but we think that is highly unlikely.

Quecee5..

if you look at the daily chart, why did you say the volume we see on weekly is more on the buyers side than the sellers ?

i know the weekly speaks volume,,but we are still pretty much inside the channel,and we did only face a retrace back up to 146 and downtrend will continue ?

how can you say the "big boys" are more interrested in buying than selling? if you look at the weekly ?

if you look at the channel i draw up on daily chart ,we are in for atleast double bottom or a new low ?

ok we take step by step,,but it looks more like a new low is coming,rather than more buyers wanna push it to 150..

Now this is getting fun!

Glad I talked some sense into you, Gucc?

looks like no bulls here

+4.3% today

no comment

This was my advise in my last post:

Just to help you all: short now tp=141.65
then long tp= 144/145
then short tp=138

Bro we can go all the way to 136 and still be in a nice uptrend. . .
My target has been 136 months ago bro and my view hasn't changed. . . but watch what happens when we get down there. . . Bulls will defend thier position at 131. . .

Now if you are talking a new low - lower than 118 I would say that is highly unlikely. . . Just my thoughts. . .