Cable Update (GBPUSD)

I made the mistake of thinking this one could form a rational thought.

My bad..

stop loss hit -85pips..

Well I think It will Happen for South today after some correction since last two days

GU

Some interesting teasers for fundamental considerations.

Rumour is building that the foundations for a 'debt restructure' are being set:

http://seekingalpha.com/article/2520...cturing-coming

Spain is ordering a clean up of the cajas:

http://www.telegraph.co.uk/finance/f...contagion.html

And that old pal of mine, Dominique Strauss-Kahn, is calling for new world currency, one supposes, to make his dream of a new world order be more harmonized. If I find the time, I may jot a few thoughts down upon this:

http://www.telegraph.co.uk/finance/c...-currency.html

The FT coverage is good, but subscription-based, so cannot reproduce here.

It sure looks like the late-longs are getting their clocks cleaned. Hope some of you had the wisdom to stay flat or go short.

I won't be looking at it til tomorrow AM.

The Fact is........

Should the fact that the Japanese banks are closed effect trading the GBPUSD today? At least during the Euro session?

Went long, target 1.6130/50 !

I'm with you, expecting retrace on USDX now before break

Charts to follow, but price moving back into pivot congestion - I guess in time for the news, but also because of events in Egypt - and so expect some bouncing around. Also have London open to contend with, and possible changes of plans due to overnight unrest in Tahrir Square.

These surprise fundamentals can never be trusted, and Dollar is still King for while.

I tend to use UC as my USINDX substitute, and I see a possible push back up to the 50 FE. The standard green 123.6 fib seems to have provided support.

Guppy profile on the daily has popped north, with the four hour in apparent climb mode

Pending to go long at 1.6020 and TF at 1.6108 or the earliest at PP

...I think I will be paying particular attention to EU today for signs of drag upon Cable.

trading at support region...

http://www.forexfactory.com/showpost...stcount=271402

I did a post a few days ago on playing the rate decision, it took quite a while to get approved so it fell back a few pages. My strategy is to short any strength after this decision. The PPI is out this morning. I expect this number to come in on the high side, any initial strength should be faded. The smart money knows the BoE will not raise rates.

If we also look at inter-market analysis and risk trends, the conditions do not favour more GBP strength.

If I look at these charts, the hourly is just showing oscillation, whilst the 15min shows movement back into a congestion zone of MAs, and the DP and WP. Price is also back into the middle of yesterday's range.

It's anyone's guess, but perhaps we are seeing a little nudge north for a discount sell come news? EU certainly has a better trend forming on the 1 and 4hr, which is heading south. I must admit, it is not going in the direction that I had anticipated. An older daily chart of EU shows potential support in the 1.35 region. Standard green 50 fib/23.6FE

Also, I think the fact that UK gilts have been hammered as of late, that yields are at a potential resistance.
The chart is GBPUSD with lower window being the 10 Year Gilt Future (the inverse of the yield)

The relief after the budget and coalition government were formed after May, and that Tories would be tough on the deficit, brought about a rally in both sterling and Gilts.

The chart shows that Gilts are at a potential support, and could bounce from here bringing yields down. A bullish correction in gilts is due. This would be sterling bearish all things considered.

This rally in sterling has been driven by rising yields, and interest rate expectations. However, forget the monetary tightening by the BoE, they are "irrelevant" as the market has been doing the tightening anyway. Mortgage rates are going up, sawp rates are up, Libor is rising, mortgage approvals are at all time lows, SME's are paying back debt, more than borrowing, due to cost of credit, and insolvency rates are sky high with in SME's.

A return to risk aversion, and falling yields will bring put weight on sterling when the market realises that interest rates will not be going up in the coming months. Of course I could be wrong, but I say this and allow a 20% chance of a rate increase. We always deal in probabilities as traders. So I m not being dogmatic.

+50pips downward movement expected on ppi news...

you like pickpockets,

good,

just kidding,