GBP/USD outlook

I don't think Obama will want everything to go to shit in an election year, but will have to wait and see

I'm loving the daily RSI and 4hr MACD strong hidden bullish divergence. I think we will get to 5818. If we move up from that level, there is a bullish daily arching chart pattern from mid April of epic proportions

I see a possible trap brewing which I have observed regularly on the GU. 5818 strong support is about 50 pips above the 50 fib of 5768. 5818 is very strong support and if broken, would signal a strong short for traders. However, I'll be carefully watching the 5768 area on the 50 fib for possible actual support. The same happened at 56 when we dropped from 5990. Price broke visual support only to find the fib line just below it and move strongly back up. Just as a thought in the back of my head, I will be watching for a daily close around 5818 area, then a move down to 5768.

Daily and weekly charts showing 3 MA's I refer to when looking for confluence with levels etc. 100SMA, 200SMA and 55EMA
What does it mean??

Are we saved? or is it Armageddon??

I actually have no idea

But it does look pretty

We shall see

Watching silver, it's looking kind of bullish but will wait for a break

Golds interesting
I don't know if these lines are legit but I don't trade Gold anyway, can't afford the leveraged drawdown.

Out of GU long -27. Holding hedge

Well that's more like the cable we know and love, 150 pips high to low.

We are near very strong resistance which started at ther very end of November and I think there is a good chance it will hold, it is a literal brick wall.
I have highlighted the area where I feel the market started building a bullish base last year during what was very strong bearish pressure and I think it will hold well for cable.
I also think if we do go up significantly from here (past 59), it could be a big move off such strong support

Levels I am also watching in blue. (forgot to add in 1.59 at the 38.2 fib),

I won't think of touching this until the 50 fib at 5770 or so is touched.

Still holding hedge

Notice the bullish daily pin bar around the 20th July or so last year off this level. Cable can turn on you like a snake when least expected. While 58 is broken it is clearly (not) support turned resistance.

I'm now eyeing off the 61.8 retrace as the next level of support for the pound. Some good candle closures around here on Dec and more recently. Holding hedge

Sorry, just reading over my notes, meant to say 5818 is support near the 50 fib not on the 50 fib.

Hello IBB,

Good luck with your new thread and your desire to master PA trading. I am sure you will become a grand master soon. Allegedly, some traders can predict which way price is going to go just by looking at a chart (sadly I am not one of them ) but I am told that it can be learnt and become reasonably successful. I don't know if you remember a guy called Abdul who used to post in the GU thread - I used to wonder how he managed to call every turn correctly by looking at the same charts I was looking at too. My mission is to become at least half as good as him.

As a matter of interest, did you by any chance take the Van Tharp trader test? Its free and could give you some insights about your trading. Here is the link:

http://www.tharptradertest.com/default.aspx?question=1

If its ok with you, I'll drop in sometimes and share some market knowledge/sentiments/predictions here.

All the best.

hi ibb,

just looking over my charts,its been prety much one way,found support now at 15730,which is a diaganel channel line on my monthly chart.also more support around the 157 dead area,but if that breaks ,154 is my next point of interest.this can also be seen on my 1 hour perspective,a perfect point to point.if this monthly and more closely viewed hourly give then that 154 wont be so far away.
inconjuntion the ftse100 is down from 60 ,now at 5150.this would complete this move,so im still more swayed towards 154 for cable,although will look to countertrend scalp from this hourly diaganel should price come down to it.

like the way you draw your lines,thats how i like to veiw charts,i dont trade gold either,its hard enough to keep a fixed focused mindset on cable and the ftse

Hi guys, thx very much for your interest and insights very much appreciated. Just in bed on a Sat morn with mum and baby so will text chat later in weekend. Thx again, have a great weekend guys

If Silver does break to the upside, those silver arches tell me it will be a big move. I want to jump on that gravy train. It has a long way to go up to catch up to its correct relative price to Gold (About 1/16 apparently)

The following are purely my own thoughts on the markets based on 2 things.

1. Money and Markets and Uncommon Wisdom fundamental analysis and forcasts.
2. A change in market structure and direction which supports their analysis.

It seems to me that 2012 is the year that turns this market upside down (or should I say downside up).
From my perspective, we were heading into free fall towards the end of last year and the market looked ready to collapse.
With the extent of financial disasters around the globe, new money stimulous has been all that has stood between us and financial ruin.
Not just any money stimulous but stimulous of enormous proportions never before seen.
In drastic times, we see drastic measures, much like when our blood sugars run very low, we drink large quantities of sugary drinks and it explodes our levels way past normal levels and sends from hypo, to hyper.

The rescue mission seems to have started in very late November, start of December last year and has continued in earnest against he main down trend all year. The lifesaving areas are undercapped in white.
We have pushed up very agressively against the weely 200sma to have 2 bullish and 2 bearish candles close above it before a close below it.

Bearish TL have also been assaulted and broken one after another all year with the market reacting to the latest on at the end of the 2012 Jan-April quarter.
We have since retraced to the previous TL and closed above the 50% fib of 5770.

Converting my monthly chart to a quarterly one (in blue), we see 4 bullish months with nice tails, we were due for a correction.

The word on the street is that much more stimulous is to come and this will keep the markets afloat during an election year. It will also destroy paper currency and send Gold and Silver to the moon over the medium and longer term.
I don't trade Gold but will be watching Silver for a breakout.

I am still very bullish as I feel the overall base of the market has been formed and will hold.

I think We are looking at some consolidation over the coming days and weeks before I think we will start to make new highs.

Of course, if it collapses from here, then I am clearly wrong

And this is my broader perspective for what it is worth.

11.42pm here, off to bed.
zzzzzzzzzzzzzz

IBB,

You raise some interesting and valid points.

I tend to view the forex world based on the two biggest reserve currencies in the world; namely USD and Euro. USA is the largest economy in the world and the European Union is the largest economic union/trading block in the world so whatever happens in these two regions going to have quite a lot of impact around the world, including new emerging economic heavyweights like China.

So what is happening to the two currencies lately? Attached is the EU weekly chart, without the pinbars (to remove noice).

The green, yellow and orange dotted lines represent the 100, 200 and 400 EMAs. The magenta and aqua solid lines represent the 3 and 8 EMAs.

What does this chart tells me and where are we going (Que Vadis)?

1. EU is in a down channel since July 2008
2. 400EMA (dotted orange line) was initially acting as the support but has now turned into resistance.
3. 100EMA has crossed below 200EMA few weeks ago indicating further bearishness (hasn't happened for a long time).
4. The quicker EMAs are showing further near term bearishness (8EMA above 3EMA)

Things are getting worse in Euroland:

5. In Greece there are now more people unemployed than employed and politically no political party is in control following recent elections. There is another general election due in June and an anti-German/ anti-auterity party is poised to come to power.
6. France has a new president and his election pledge is to re-write the recent Euro treaty (also planning a 75% tax rate which has begun to drive the wealthy to other countries such as UK).
7. German chancellor Angela Merkel has lost state elections recently.
8. Netherlands, a staunch Euro advocate, is expected to elect a new Government in a few months time.
9. There is a referendum due in Ireland soon to ratify the recent Euro pact.
10.Spain and Portugal are struggling and their borrowing costs have rocketed in recent weeks.
11.Rich people are moving their money out of local banks and to safehavens such as Sterling/UK. i-e possibilities for bank runs.

What is happening in the US?

12. It is the Presidential election year and one can expect all the QE measures to boost the economy
13. Economy is slowly starting to grow
14. No more QE expected in the near future
15. Policymakers do not want a strong $

What is happening in the UK?

15.There are some good as well as bad economic indicators recently giving mixed signals on the economic recovery.
16.Money is flooding into UK from Euroland (see Der Speigel article), which is going to increase investment and boost economic activity)
17. The Conservative government took a beating in the recent mid-term local government elections and bound to bribe the electrate with tax breaks and incentives in the next budget.
18.The borrowing costs are at a record low so technically it is possible to borrow its way out of trouble.
19. Policymakers do not want a strong Pound (bad for exports)
20. QE is unlikely in the next few months but cannot be ruled out.
21. Queen's diamond jubilee and Olympics should help with boosing economic activity and feel good factor.

So what do I think about EU and GU?

22. EU will continue to tank against the dollar but 1.26 is a key level to break.
23. GU will be caught in the Euroland troubles and will be affected (there is a 60% positive correlation between the two pairs) and the near term outlook is bearish.


Good luck and wish you green pips.

Hi Rasi thx very much for your input much appreciatedI really struggle understanding politics to be honest, I find charts much easier to read I'm hedged so will go with the flow. I have an outlook of stimulus money and printing going into overdrive to rescue Europe rather than letting all the global dominoes fall over and plunge us into a global depression, but you never know what the market will give us. I'll hold my hegde until I am more sure of things changing just to be safer. Cheers mate, thx again