Cable Update (GBPUSD)

Anyone dare to short GU now ?

Gidday Andex

Got long an short

thought we might see close to 160

then maybe retrace to lower levels below 158

One of them will be right,the other I will have to wait a bit longer:nerd:

Fundamentally we know few facts already.
1. Feds announced QE reduction
Having Feds announced QE reduction and not to do anything is unlikely.
I believe we will have 10-15B reduction announced tomorrow.Dollar next 6months most probably will strengthen.

Article worth reading

5 reasons why the Fed will taper

1. Ongoing recovery: Despite the recent weak employment report, the US is still growing and creating jobs. Jobless claims are edging lower and PMIs show an intent to hire. This recovery isn’t that strong, but at this point, the effectiveness of bond buying is limited in creating a “wealth effect” that Bernanke mentioned.
2. Fear of inflating bubbles: Bernanke and co. can look at QE and see it as a success story in the housing market, with a clear recovery. However, with house prices rising around 12% YoY (Case Shiller), perhaps the time has come to reduce the level of stimulus (the Fed doesn’t see tapering as tightening) to avoid blowing a bubble. In addition, the Fed might worry about other bubbles in stocks, commodities and emerging markets.
3. Thick hints: The notion that the “Septaper” is coming is strengthened by recent comments from Fed officials, that come with “an open mind” to tapering in September. This includes the doves. With the Syrian issue somewhat defused, there are very little chances that the Fed will not taper.
4. Legacy: We now know that Summers will NOT inherit Bernanke. Even if Bernanke stays on the job and doesn’t evacuate his chair for Janet Yellen, he would probably like to begin unwinding the biggest monetary stimulus in history and not leave it as a hot potato.
5. Passing the ball to the government: the Fed would prefer that the government pick the baton and provide address the sequester. They already criticized the government for lack of short term stimulus and talked about things that are out of their realm.

6 scenarios and USD reactions
This is a big shift in policy as it is the beginning of the end of QE: the beginning of the end of printing dollars: a positive for the dollar and negative for bonds, commodities and stocks.
QE tapering is not fully priced in, and we could see the dollar strengthening afterwards. A lot depends on the guidance to the next tapering steps, and this remains a mystery for now.
Here are the scenarios, starting from the more probably ones to the less probable ones:

1. $10 billion tapering and intent to end QE in mid 2014: This scenario has the highest chances: a relatively symbolic reduction of QE would send a message of a shift in policy, but is a cautious move that leave the door open to a slow and gradual process. Sticking with an intent (not a commitment) to end QE by mid-2014 would be a repetition of what Bernanke said in June. This scenario is almost priced in: the dollar would strengthen, but in a limited manner.
2. $15 billion tapering and intent to end QE in mid 2014.: This scenario also has good chance but would be more dollar positive as it reaches the higher end of expectations.
3. $10 billion tapering and no future hints: In this scenario, tapering would be seen as a very cautious and perhaps only symbolic move, but without any quick follow through to end QE: an initial move that will be very carefully assessed afterwards. Such a decision would significantly weaken the dollar and strengthen stocks, as it could be perceived that the easy money will continue flowing. Chances are lower.
4. $15 billion tapering and no future hints: This has somewhat lower chances, and will leave markets somewhat confused, but tapering at the higher range could slightly help the dollar.
5. $20-25 billion tapering: A more significant tapering cannot be ruled out, as the total monthly buys stands at $85 billion, and the timetable until mid 2014 is not that long. In this hawkish scenario, the dollar would soar as it is beyond the consensus. The scenario has little chances.
6. No tapering: Given recent worries from retail sales and jobs, also this scenario cannot be ruled out. Tapering could wait for one of the two remaining meetings until year end. A cautious approach by the Fed would send the dollar sinking as markets are expecting tapering. Given all the hints, this scenario has low probability

Putting it all together Like Tau Trader my shorts on GU and GC are longer term until hit TP 1.55 and 159.5 GC
Positive swap on GC counters negative swap on GU

Hi Eliteincome, Goodday too.

I'm very bearish for GU and always take short position (never long) since monday,
and imo it's hard for GU to penetrate 1.5935 to 1.5950 resistance area... but who knows ?

Always green pips for you & All.

agree

the dollar really is a pain in the ass

I have posted my FOMC Analysis for today for those who are interested here:

http://www.forexfactory.com/showthre...31#post6971731

There is no reason to see a weak sterling. I'm wondering why you are expecting?!!!

looking at the index gbp and usd are right at extremes
now looking at the news..which i have no clue about..but if i had to refer to:-

I would say..cable is being bought because traders are believing a raise in interest rate is on..but the panel have indicated QE will carry on and all of them want the rate to remain as it is..cable is showing bearish divergence. The mofo needs to to dip..nothing goes in a straight line, i think

also looking at the monthly..price has pulled back to breakout point..maybe a retest?? which im playing but extremely dangerous

But they said that there is no reason for further stimulus right now!

I quite understand your reasoning based on fundamentals... but I keep my long till 1.61xx

Good day to you Nav

sell gbpusd at market price (1.5966) SL 30 PIPS tp 100PIPS
Happy trading!

How we doin' fellas?

Important day today...

Good day,

We now need to see if 1.5954 becomes support

Regard

good day,

I'm now also marking 1.58218 as a short target going forward.

All the best

G/M,

Small pip range (< 20 day atr which is currently 86)daily candle yesterday - an IPB which makes the 5963 hi a minor fractal swing hi on the daily t/f....Asian session mixed - Price is up off asian and current daily lo which is a retest of a previous 1hr/minor 4hr swing lo zone above yesterday's lo, and early london session was buying too...Uk data at 0930am saw a further leg up on the knee-jerk reaction with Weekly R1 @/around the current daily hi. Price is in the monthly part of a previous minor monthly/minor weekly/daily swing lo zone the shorter of those t/f's beginning weekly: 5995-6064, the daily: 5995-6014. Price remains in a general opa uptrend on 1hr 4hr daily and weekly at time of writing and trades above it's 100 and 200sma's on all these t/f's

So far today 91% of 20 day atr covered. So far this week only 30% of 20 week atr covered and so far this month 90% of 20 month atr.

Potential resistance factors to the upside:

5964 Weekly R1 @/around
5970 Current daily hi
5982 Daily R3 @/around
5984 76.4% 6349-4811
5995-6064 prev minor weekly sw lo zone (non immed) incl 5998 = 61.8% 6746-4811, and 5995-6014 prev minor daily sw lo zone, 6052 = Weekly R2 @/around, and 6055 = Monthly R2 @/around
6122 85.4% 6349-4811
6165-6178 prev daily sw hi zone
[ 6180-6200 weekly desc t/line coming thru on this week's weekly candle (if reached.)
[ 6190-6210 weekly/monthly descending trend line (top of old monthly contracting triangle) coming thru on weekly candle
6278-6309-6349 prev daily/weekly/monthly sw hi zone incl 6278=76.4% 6746-4811, and 6309 = Weekly R3 @/around and 6320-40 = monthly descending t/line coming thru on this month's candle
6394 Monthly R3 @/around

G/L

Talk of ' strong offers ' 5975-6000...How strong are these bears now ?

G/L

haha

....unless there is a big sell off today - yesterday's low likely to become a fractal swing HL on this daily t/f in it's uptrend...time will tell if this greater probability does play out....Price however is still increasingly / arguably ' over bought' / ' over extended' on certain t/f's so will be interesting to see what develops....this is the vfery definition of an uptrend for some and for others a reason to short and ' mean revert,' or more.

G/L

1600 - 16050