GU, GJ and EU Analysis Thread

I understand that a day in the markets can change a trend within seconds. However, without throwing a plethora of comment and citation upon the thread, I am particularly interested in next week's news.

Tuesday: Public sector net borrowing.

Wednesday: MPC minutes meetings, and then, and this is the one I am really waiting for, Inflation report hearings.

Cable looks as though she is chomping at the bit to start running, but is being told not to give the game away too early.

Still in my long... ha, little news spike was almost a given, hence the reduced stake and ample SL.

Inflation is the big thing with cable, methinks. This QE has to stop soon for such a small country, or interest rates will have to rise.

I am hoping (ha!) for a close tonight above 1.5650 or otherwise we have what's called a Hanging man. As I'm in heavy I don't want any drawdown or I'll close and then probably regret it later next week.

Condor: You seem to be doing a plethora of rendering - the wall seems to be taking a while. It must be a castle. I hope your getting it into all the interstices...

The grinding of my teeth as I read the editorial concerning the recent meeting of the cabals last weekend in Basel is somewhat akin to having grit as a substitute for saliva.

So, the general consensus that gains publishable allowance, is that the resolutions decided upon in Basel will serve well the economies of Europe.

How dare it be the case that a protraction to an already shameful reprise for criminals is granted so freely and without any direct debate with those that are to pay for this: the taxpayer. What, what’s that I hear you say, we elected these people to represent us? Hmm… with no intention of trying to demean the general population, I ask this; did any candidate or party explain the bondage of servitude that comes with helping to secure the privilege of social ascendancy?

Before the ink had even set in Basel, Deutsche Bank began hastily snapping up smaller entities – Deutsche Postbank being one. I summize, in order to have enough of the little people on the books in order to attain the status of too-big-to-fall. Of course, no matter which bank we become captive to, the charges are going up, and the flexibility to deal with them going down.

We then have the dominatrix of French finance – Christine Largarde. ‘The decision of the Basel Committee to gradually implement these ambitious requirements will enable banks to sustain their capacity to lend to the economy and won't compromise the economic recovery.’ Hmm, the tier 2 capital levels decided upon this weekend are below those that were held by Lehman Brothers in 2008, and we know what happened there.

But fear not, my fellow little people, as we are told that what the new agreements made in Basel mean are that it will be owners of banks, and not the taxpayers, that foot the bill for any bailout of a bank in the future. Hmm, I thought we owned most of them now anyway. And what happens if a bank, with lots of little people on its books, turns around and says, our owners are skint, can we have some more dosh from the government wallet? Governments are hardly going to say no, I think.

Returning to Chrissy, she insists that all members of EuroLand have to implement these rules – although the time can run to 2018 - but that if the US does not, then France will not. I mean, seriously, how can she set the example, when placing such a caveat in place before anyone has got out of the changing room in order to play the ‘game’? I would like to have been a fly on the wall when the Secretary of the Treasury heard that one coming from the Europeans. Come to think of it, one wonders what Timothy Geithner was telling Europe to do when he recently visited this tortured terrain.

The surge for the Swiss Franc may be a telling sign of what Europe made of all the decisions made in Basel.

Smikester – yes, it is a rather large wall with many, many metres, and is being done in the traditional style. Add to this, the pottering of an ageing man looking for an excuse to take in the countryside whilst one works on the wall – and the blackberry – and to partake of a glass or two whilst doing so, and which affords the opportunity to get away from the screens, and it becomes clearer as to why the rendering is taking me time.

Still long Cable.

GU is making HH's and HL's on the 5 and 15min TF...a continuation of this upmove this afternoon will bring us back to the upper distribution formed though asia and early london....if we can manage to pass that we have the daily pivot and single prints located on yesterdays profile at 5628/22. these would be a good target before we see another retrace on the hourly.

Stocky

price slowing down at the upper distribution....

upper distribution parameters 5564 to 5586.....maybe a small retrace on the 5 min before a continuation through.

todays point of control currently at 5572.

Stocky

I think it is key we break the previous LH on this current upmove if we are to see a direction change....A break of previous LH resistance and the pivot gives us 5622 as a target....alternatively we bounce lower from todays point of control and upper distribution area to form another lower low in which case I see us re-testing monthly support and major level over the last few week 5471.

Stocky

Price back at 5540 area ahead of FOMC...I dont expect much movement before that data so I will be calling it a day here and maybe drop in before the FOMC statement. Attached a dollar index and s&p500 chart to give an overview of stocks and dollar strenght prior to release.

Daily Dollar index seems to be in a flag pattern. Given we have a daily candle closing outside the bollinger band on the 14th indicates a stronger downmove is possible in the dollar. FOMC data may trigger the dollar to break out its daily flag which would mean increased momentum and in turn cause stronger movement in GU.

Stocky

So, the Office for National Statistics issues a Public Sector Net Borrowing figure of £15.3bn. Of the many responses that followed, the darling diva down at Daiwa, Ms. Hetal Mehta, thinks that it is ‘worrying’. Yeah, I’d be worried, too, but bugger me love, I’d hate to know what you find scary. From where I sit, this figure tells me that a larger price is having to be paid back to anyone purchasing index-linked gilts due to an increase in the rate of inflation… a topic I have been worried about for many a submission upon this thread. By association, I infer that investors have doubts about the credibility of the weak pound when set against the cost incurred of producing anything in the UK. However, a rise in interest rates maybe on the cards, which, I summate, will be beneficial for the pound, but lead, I believe, to an increased state of stagflation – stagflation as in the real world, and not on an economist’s spreadsheet. Ms. Mehta, me thinks that your crown may be about to slip.

Meanwhile, over in Brussels, Sarko the barko was beside himself with indignation at the remarks by Viviane Reding; that the deportation of Roma from France was ‘disgusting’. Jose Manuel Barroso, probably fearing that his time allocation to a siesta was about to be infringed, tried his upmost to chair the meeting away from the issue of semantics, but Sarko was having none of it as he passionately blustered on about European Unity and that the role of Commissioners such as Viv the vixen should not be to undermine national policy. Uh, really, I thought that was exactly what they tried to do in order to add to the paperwork in Brussels, and therefore the headcount and budget. Anyway, back to the bustup at the Brussels bar. With a not too unexpected intention of silencing critics – it must be in his nature, maybe – big daddy Silvio Berlusconi proposed that they needed to withdraw speaking rights for Commissioners and their staff. Whether that included they themselves not being allowed to ogle young female commissioners that like older men that are loaded, one may never know, but as salacious Silvo spoke, doors began to close and plastic sheets started appearing on the floor. Angela Merkel, not one to miss any calculated move, decided to proffer matriarchal advice to the temper tantrum of Sarko, suggesting that they needed to convey an image of serenity at the end of the summit, and that they also needed to avoid using certain expressions. From here, she moved on to another topic. Perhaps she can start with asking Jean-Claude Trichet what in the world he was telling the FT last Friday about how the Euro was never in trouble ‘seen from the inside’. You mean you are deliberately causing chaos in the markets for what purpose we are not privy to, or, as I suspect, you are talking out of your proverbial on the continuing circus that is EuroLand?

Meanwhile, here in the slow lane of country lifestyle, I espied two blue tits chasing bugs around the wall that I am currently rendering… I suppose many here were expecting a different ending.

Update on dollar dx..

$DX broke out of the flag pattern highlighted yesterday after the Federal Reserve said it was ready to do more to help the flailing U.S. economy but stopped short of announcing specific measures. Although rates remain the same the market will probably look at them comments as potentially more QE is a possibility which means increasing defecit therefore dollar weakness.

Currently the dx is trading at 79.78 which is breaking feb/april lows for this year....after this level next major daily support is at 77.0 and then 74.44 area....A dollar move down to these areas will push GU higher along with it. Given we have broken out of the daily flag we should see momentum increasing on dollar weakness.

Stocky

hourly flag...watch for the break to the upside.

Stocky

Good day everyone,

first time i m positing on this thread.

my view for cable is upside
old charts
http://www.forexfactory.com/showpost...stcount=253882

http://www.forexfactory.com/showpost...stcount=254636

http://www.forexfactory.com/showpost...postcount=8452

current chart

Good luck everyone

Good day stocky

well my view of flag with counts.. i see there is some single prints left in yesterdays profile at 15588-15600. I am expecting this to be filled before we fly and that is the count E.

I hope you dont mind posting in your thread..

Good luck with your trades

Regards

Hi Samirb,

Welcome to the thread....look forward to you posting analysis.

Well done on spotting them single prints... if support at 5615 fails then they will be sure targets....not a necessity to fill them before we continue up from here but a definate possibility if support fails.

I have GU breaking out of a TL on a 5min chart....if this fails to get us higher then we will probably trade lower through NY and target them SP's into asia.

Stocky

The flag turned into a triangle. This is an M15 chart.



Break and test of the upper trend line. London might mess up the neat standard procedure I'm following.

So, three cheers for the s.o.p. preventing any loss. Welcome and nice charts Samir. I've seen your posts before on Forex Factory.

It might go a bit quiet from me for a few days because I'm going to examine a couple of vineyards in Bordeaux.

Thanks for the welcome

For me still its flag.. as long as it doesnot breach D point.
For Flag specially i dont care about trendline i care about counts..

Good Luck with your trades bro

Hi Samir,

Hopefully the pace here is to your liking.

Nothing much more to say, apart from enjoy the wine Smikester.

Good day everyone

possibly inverted head and shouder in Gbp index

Good luck

Regards

Good day to you,

I am doing my duty to thank you for your contributions to FF - an individual wanted me to convey his gratitute, as he is not able to post it here himself.

I have undertaken to thus post.

Keep it up. You have a high quality thread going here.

All success to you

Regards