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Cable Update (GBPUSD)

  • #363,621
  • Feb 14, 2014 11:57am Feb 14, 2014 11:57am
Quoting Davit
{quote} To be honest after Bernanke last tapering I anticipated Yellen to continue that trend.My mistake was I should of waited to see her testimony. Its a huge fk up on my part. On a bigger scope EZ economy is pathetic and UK biggest trading partner is EZ hence I don't see EU at 1.40+to complement Cable new possible highs. Correlation is too great. In May Greek elections coming and new fresh crises for EZ and likewise IR raise is 1-2 year away so cable 1.70+ is unrealistic expectation considering micro fundamentals.
thanks for your reply.
fortis fortuna adiuvat
  • #363,622
  • Feb 14, 2014 11:58am Feb 14, 2014 11:58am
EU provides clues
Despite of massive GU gains EU is still on descending channel.
If this was fundamentally driven EU should of been 1.39 already.Its not even breaking 37
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In trading, you have to be defensive and aggressive at the same time
  • #363,623
  • Feb 14, 2014 12:10pm Feb 14, 2014 12:10pm
Quoting Citiboy
{quote} Retail shorts are less than 5% of total flows. The leveraged fund community is already long GBP, and probably has been getting longer on this move up. If there weree any massive stops higher they have already been triggered between 1.6650 and 1.6700. In terms of the data, is has not been all good. The unemployment rate is less of focus for monetary policy now, and on th last print the actual number of claimants came in worse than expected, CPI was lower than expected, manufacturing and services PMI were both lowering than expected and have...
This sounds like something a research desk might publish. Yes, some real money clients buy into it but not so much the big macro movers who are trader types more about charts and stops just like us than investor types who are trying to do more in-depth fundamental. Then there are the trend-following CTAs that are just trading some daily moving averages crosses and breaks. On a day to day basis I can tell you the trading desks aren't looking at this granularity. I don't know what to say to you except the markets aren't always 100% logical and it's more about animal spirits and sentiment than anything else. And better data next week will have more upside than worse data next week for the downside. Also pretty sure retail are a lot bigger than 5% but since I don't work at a bank trading desk anymore I can't give you the stats.

If you try to rationalize every move and start trading based on what you think is rational instead of the price action, positioning, and news releases we all know that doesn't work.

It doesn't take much for the guys submitting the estimates to lowball it. So many institutional participants across the spectrum are vested in GBP longs so it behooves them to make it work. Even if the numbers and forecasts were squeaky clean (and we know they're not for many FX numbers), the median estimate often tends to get the direction right but underestimates the magnitude of the data because the economists are conservative about their estimates to not look like idiots.

We also know the macro movers are known to completely ignore a news release if they want the market to go a certain way (like last NFP and UJ, it comes down, they buy it back up).
  • #363,624
  • Feb 14, 2014 12:15pm Feb 14, 2014 12:15pm
Quoting Citiboy
{quote} Yes, daily RSI deserves a post of its own. {image}
Sometimes its just a matter of time. Daily MACD is huge bearish divergence and stochastic, all that crap. Just have to wait for next week!
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All posts are my personal opinion
  • #363,625
  • Feb 14, 2014 12:21pm Feb 14, 2014 12:21pm
Quoting Citiboy
Any takers here? Selling 1.673x, put an SL above 1.6753ish? Fundamentally Carney's shifts in foward guidance were dovish, as the next rate hike is now based on a much broader set of vague indicators. There are three major UK releases next week as well. IF these releases do not confirm the BoE's rationale for massively hiking 2014 gdp projections, GBP will trade lower. {image}
Funnymental?

Look at E/U what funnymentally from EZ support current rate?
  • #363,626
  • Feb 14, 2014 12:29pm Feb 14, 2014 12:29pm
Quoting Ken A
{quote} Funnymental? Look at E/U what funnymentally from EZ support current rate?

I agree we can all laugh at the funnymental until you get a massive 6 month trend like USDJPY off BoJ QE or AUDUSD dropping 1400 pips on rate cuts. The only way to stay hugely positioned and confident is to know exactly what you are trading in my opinion.
Twitter: @TrendersGame
  • #363,627
  • Feb 14, 2014 12:30pm Feb 14, 2014 12:30pm
Quoting Citiboy
Any takers here? Selling 1.673x, put an SL above 1.6753ish? Fundamentally Carney's shifts in foward guidance were dovish, as the next rate hike is now based on a much broader set of vague indicators. There are three major UK releases next week as well. IF these releases do not confirm the BoE's rationale for massively hiking 2014 gdp projections, GBP will trade lower. {image}
Hopefully get a swing trade next week at approaching resistance.
Come with me if you want to live....
  • #363,628
  • Feb 14, 2014 12:34pm Feb 14, 2014 12:34pm
Quoting Citiboy
{quote} I agree we can all laugh at the funnymental until you get a massive 6 month trend like USDJPY off BoJ QE or AUDUSD dropping 1400 pips on rate cuts. The only way to stay hugely positioned and confident is to know exactly what you are trading in my opinion.
Good to know you are a long-term trader or scalper?
  • #363,629
  • Feb 14, 2014 12:36pm Feb 14, 2014 12:36pm

To Whom it may concerns



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Don't be smart. Be rich.
  • #363,630
  • Feb 14, 2014 12:54pm Feb 14, 2014 12:54pm
Quoting Ken A
{quote} Good to know you are a long-term trader or scalper?

I like to do both, just within a trend based on central bank policy shifts.
Twitter: @TrendersGame
  • #363,631
  • Feb 14, 2014 12:55pm Feb 14, 2014 12:55pm
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  • #363,632
  • Feb 14, 2014 1:06pm Feb 14, 2014 1:06pm
Quoting Citiboy
{quote} I agree we can all laugh at the funnymental until you get a massive 6 month trend like USDJPY off BoJ QE or AUDUSD dropping 1400 pips on rate cuts. The only way to stay hugely positioned and confident is to know exactly what you are trading in my opinion.

That's when the trades get asymmetrical.

I shorted this to early again. My model even pointed to 167.47, but I just wanted to get in front of the trade for next week. This is a currency war and the next salvo is being launched by the brits next week. 80 pips down right now, but by next Wednesday I expect to be up at least 200 pips. If I am right I will double this little account again, If I am wrong I could care less.
  • #363,633
  • Feb 14, 2014 1:08pm Feb 14, 2014 1:08pm
Quoting capitulation
{quote} That's when the trades get asymmetrical. I shorted this to early again. My model even pointed to 167.47, but I just wanted to get in front of the trade for next week. This is a currency war and the next salvo is being launched by the brits next week. 80 pips down right now, but by next Wednesday I expect to be up at least 200 pips. If I am right I will double this little account again, If I am wrong I could care less.

Whats your stop loss?
Twitter: @TrendersGame
  • #363,634
  • Feb 14, 2014 1:14pm Feb 14, 2014 1:14pm
Still enormous upside pressure. I wonder if we see a new high before the market closes.
Fix up, trade sharp ...
  • #363,635
  • Feb 14, 2014 1:15pm Feb 14, 2014 1:15pm
It seems that once again a massive trap is being prepared to trap the naive breakout traders. While BoE has adopted a more dovish bias by dropping the unemployment rate as a rate hike trigger, FD has clearly stated that they are on their course to taper gradually.

How can this be bullish for Cable is beyond my imagination, other than we will be witness to a massive selling next week.
  • #363,636
  • Feb 14, 2014 1:16pm Feb 14, 2014 1:16pm
Quoting Citiboy
{quote} Whats your stop loss?
i think he don't use SL or...?
With a good book and quality paper you can fine wipe your ass.
  • #363,637
  • Feb 14, 2014 1:19pm Feb 14, 2014 1:19pm
so, now what? is it going to go to 2.XX? or is it going to follow the 6-years old pattern and dive?
what do you think?
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  • #363,638
  • Feb 14, 2014 1:21pm Feb 14, 2014 1:21pm
Quoting Psychologist
It seems that once again a massive trap is being prepared to trap the naive breakout traders. While BoE has adopted a more dovish bias by dropping the unemployment rate as a rate hike trigger, FD has clearly stated that they are on their course to taper gradually. How can this be bullish for Cable is beyond my imagination, other than we will be witness to a massive selling next week.
Do not forget that the Dollar is straight out bearish. Sterling is traditionally seen as a solid currency plus the news from GB were very hopeful, so the institutionals choose this pair to short the weak Dollar.
Fix up, trade sharp ...
  • #363,639
  • Feb 14, 2014 1:27pm Feb 14, 2014 1:27pm
February 14, 2014 6:06 pm
Severe winter masks US economic recovery

By Robin Harding in Washington




Strong evidence that a cold and snowy winter is behind some weakness in recent US data is bolstering hope that the world’s largest economy remains on course to accelerate this year.
The industrial production report released Friday was the latest indicator to be weak – down by 0.3 per cent in January, with a bigger 0.8 per cent decline in manufacturing output. However, the US Federal Reserve directly blamed the weather.
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If the weather is behind the poor January data, then the economy should be able to accelerate in the spring, as underlying strength in consumer demand and reduced fiscal tightening shines through.
But the weather-affected data still poses a problem for the Fed, because it masks the true underlying strength of the economy, making it hard to know whether it should speed up or slow down the tapering of its asset purchases. The central bank is currently buying $65bn of long-term assets every month.
“The severe weather in January contributed to a decrease of 0.8 per cent for manufacturing production,” said the Fed, which compiles the industrial production data. “Numerous motor vehicle assembly facilities lost one or more days of production during the month. “
An unusually cold winter and heavy snowfalls in the east and midwest of the USA has caused factory closures, slowed down transportation networks, and closed retail outlets, which in turn dampens demand for factory products.
”Production came off sharply in January as the cold winter weather took many factories offline temporarily,” said Chris Rupkey at Bank of Tokyo-Mitsubishi UFJ in New York. “This is not a signal that the economic expansion is faltering. We expect a sharp pick up in production in the spring.”
In Indianapolis, for example, there were widespread shutdowns in early Januaryincluding a Rolls-Royce factory in the city. Many companies announcing their full-year results have pointed to the weather as a factor that will hit them in the first quarter of 2014.
“I will note that the extreme cold weather in much of the US will undoubtedly affect volumes for the first quarter as many retail locations had to close for several days,” said Richard Kramer, the chief executive of Goodyear Tire & Rubber. “However, our dealers don’t expect that full year volumes will be affected.”
“As a result of the road and facility closures caused by the extreme weather conditions, industry-wide production schedules for January 2014 were delayed,” said Jason Lippert, the chief executive of Drew Industries , which makes components for caravans and mobile homes.
Another line of evidence suggesting that the weather has taken a severe toll is a 0.9 per cent decline in Canada’s manufacturing sales in December – the first fall since August.
In contrast to jobs data, which take a monthly snapshot of employment, it is easier to trace how cold weather hits industrial production. The last two months of US jobs data have come in below trend, with 75,000 jobs added in December and 113,000 in January, creating concern about the health of the recovery.
Fourth quarter industrial production was revised down for the US, from an annualised pace of 6.2 per cent to 4.6 per cent, which does suggest a bit less momentum in the economy at the end of last year than previously thought.





Twitter: @TrendersGame
  • #363,640
  • Feb 14, 2014 1:30pm Feb 14, 2014 1:30pm
Quoting Hickson
{quote} Do not forget that the Dollar is straight out bearish. Sterling is traditionally seen as a solid currency plus the news from GB were very hopeful, so the institutionals choose this pair to short the weak Dollar.
There is absolutely no pressure on the BoE to tighten. U.K. inflation is soft and why on earth should they tighten when they still have a room to ease more and eliminate the slack completely?!
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