Best Thread BBmac's Gbpusd thread

[bbmac]

1hr congestion channel

The screenshot below is the current 1hr congestion, the inner lines showing where the majority of price action is, the outer lines being the xtremes of the congestion, ie yesterday's hi and lo 7003/6888 respectively.

Depending on price action leading up to it, and if not already in a position, I might be interested in buying/selling a 15min + perfect thrust candle close b/o of the extremes, if it develops.

G/L

 

[bbmac]

market commentary

0722 GMT [Dow Jones] EUR and GBP could pop higher vs USD and JPY if services PMIs due later Wednesday show further firming, says UniCredit. But it warns that markets are "clearly overstretched" ahead of Bank of England and ECB meetings Thursday and nonfarm payrolls Fri. That means "any further bounce may offer a new excuse to take profit," bank says. EUR/USD trades at 1.4373. GBP/USD trades at 1.6912. (KJM)

0733 GMT [Dow Jones] Wednesday's UK data slate offers June industrial production and July's service PMI and these could support sterling further says UniCredit. However, given that investors will likely want to square books ahead of possible new QE measures from the BOE Thursday and NFP's on Friday, the bank expects any break above 1.70 to be short lived. GBP/USD now at 1.6918. (GST)

 

[bbmac]

Current 5min channel

5min is now congested between the 2 areas shown with a previous minor 1hr swing lo=potential sbr capping the topside whilst bids @ 6900-10 have halted downside progress.

Uk data at 09030am London

 

[BSD]

Pretty choppy times eh BB.

The entire yesterday was just one big sideways fakeout-shakout in cable.

 

[bbmac]

Pretty choppy times eh BB.

The entire yesterday was just one big sideways fakeout-shakout in cable.

Hi BSD, Yeh not easy but some plays on the lower time frames. This 5min channel break for example was hi-probability on the thrust candle close. Earlier the close of the 0830 15min pinbar was the 4th long wick/shadow candle down to that 6900/10 bids on that t/f (implying rejection of area) and a good buy too. Price move up aided by 0930am Uk data release, but I think the clues were there.

G/L

 

[bbmac]

That industrial production # released @ 0930am was best for 20mths, and this and the other better than expected PMI services aided the move up to 7000/10 offers (barrier interest rumoured @ 7010) re post above you can see the 15min pinbar at the previous 1hr swing lo=prev supp=potential support zone below, 6900/10 bids also reported..mni.

Will 1hr close as a bullish thrust out of it's congestion channel??

G/L

 

[BSD]

Hi BB, yup, you've got a good system.

My play would have been buying the first pullback / first weakness on the way up which you could see on say a tick chart or 1 minute chart. Not normally my time frames, but in these times you can usually find some good trends there when the higher time frames are having a merry chopfest.

Missed this good trade in cable tho, was looking at Dax instead at the moment. Normally the correlations between all major instruments are quite extreme usually anyway these days.

But today Dax stayed stuck in a range while cable jumped.

So, sidelined at the moment.

Good thread here.

 

[bbmac]

market commentary

Thx BSD.

No 1hr bullish thrust close out of currrent congestion.

0905 GMT [Dow Jones] There is strong evidence of selling pressure in GBP/USD from the 1.7000-1.7020 area and technical resistance between 1.7020-25 says BNP Paribas. If the rate keeps failing below 1.7025 then the technical picture will rapidly deteriorate says the bank, creating bearish divergence by the 9 week RSI. GBP/USD now at 1.6989 from the day's high of 1.7006. (GST)

Contact us in London. +44-20-7842-9464

 

[bbmac]

1min trigger plays

As price reached the potential resistance area @ 7000/10 (y/day hi, prev 1hr swing hi zone, Dly R1, offers reported 7000-10, rumoured option barrier @ 7010? ) a nice 1min trigger t/f repeating Reversal set-up developed (point a,) then a repeating 1min Re-entry (after pullback) into next t/f (5min) upmove (not really an uptrend on 5min yet per overall price action-peak/valley analysis) at point b for a smash and grab of pip gain.

The 1min Re-entry at the 23.6% fib of the i/day move up failed to see a 'with trend' follow thru to new highs, so looking now for a hidden divergence based 5min Re-entry set-up timed as a regular divergence based 1min Reversal set-up preferably @ a 1hr previous swing hi=potential rbs zone. Whether a new HH will result of this (if it sets-up) is open to question but should see some pip gain on an attempted re-test of highs even if it results in a LH and a continued move lower.

G/L

(point a = Reversal Extreme, point b = Re-entry 4)

 

[bbmac]

1hr chart update

The 1hr screenshot below is the updated current position as I see it in respect of previous obvious near-term imbalances of supp/dem (swing hi's) and dem/supp (swing lo's) and unbreeched fibs/trend lines on this t/f.

The unbreeched fibs are drawn from 6471 and 6693 to 7006 as well as 6888 to 7006

G/L

 

[bbmac]

5min re-entry to upmove

....so looking now for a hidden divergence based 5min Re-entry set-up timed as a regular divergence based 1min Reversal set-up preferably @ a 1hr previous swing hi=potential rbs zone. Whether a new HH will result of this (if it sets-up) is open to question but should see some pip gain on an attempted re-test of highs even if it results in a LH and a continued move lower....

So the set-up below shows the repeating hidden divergence based Re-entry set-up that developed on 5min into the 30min upmove, @ potential rbs = prev 1hr sw hi and 38.25 of 6888-7006, following the pullback. There was no clear 1min trigger t/f Reversal set-up so I used the close of the 1105 5min candle as the trigger to give 6968ask entry. The set-up came at a LL on this t/f although crucially still at a HL on the 30min trend t/f into whose upmove the set-ups indicated a hi-probability re-entry point after the pullback off 7000/10 resistance. (have just exited in the 7000/10 resistance zone to book profit, the choice was take profit or move stop to b/e and see if a HH would develop above current resistance zone, rightly or wrongly I chose the former.)

G/L

(5min Re-entry 2)

 

[bbmac]

market chatter

last post today.

CABLE: Picking up talk suggesting that a UK merchant bank is providing
the main sell interest ahead of $1.7010, the rate on its latest push
higher faltering around $1.7006, just under earlier data react highs at
$1.7008. Rate currently trades around $1.6994. The UK merchant bank
announced a stg1bln rights issue Tuesday, which may be prompting the
talk...source Mni.

1042 GMT [Dow Jones] GBP/USD is back at the make or break level around 1.70. The rate is running into strong offers here and repeated failure could trigger a bout of profit taking and open risk toward the day's low of 1.6900. However, any break above the day's and the 2009 high of 1.7006, followed by a move above the strong 1.7025 resistance area, could see a combination of short covering and fresh longs trigger a run toward 1.71. GBP/USD now at 1.6990. (GST)

Contact us in London. +44-20-7842-9464

 

[bbmac]

Monthly chart

So today's continued leg-up after the dip to 6888 off yesterday's 7003 hi sees price touch the bottom of the previous swing lo=previous support=potential sbr zone present on the Monthly t/f. the zone is a lso a previous swing hi on that t/f, (see post #2 of this thread.) The 50% fib of the major 2.1162-1.3505 fall is @ 1.7333, and there is a descending potential resistance trend line joining that 2.1162 hi with the 2.0157 swing hi, that is probably better viewed on the weekly chart.

G/L

 

[bbmac]

Data due in rest of this week

The big fundamental data announcements due in the last 2 days of this week will likely have some effect on the near-term future direction of the pairing. Tomorrow sees the 12 noon Boe/Mpc rate announce and whilst no change @ 0.5% is forecast the accompanying statemnet will be viewed clsoely to guauge Mpc thinking on extending the so-called QE (Quantatitive easing) programme by a further £25bn to the max amount currently sanctioned by the traasury. Opinion is split here as to whether they will at this stage, although it is likely that the statement will indicate that the option remains on the table if it hasn't already been excercised. The ECB rate and trichet's mthly press conference follows @ 12.45/13.30pm respectively.

Friday sees the U.s NFP and un-emp rate announcement and as alreadt discussed in a previous post on this thread the forecast's deviation from the actual #, the un-employment rate, manufacturing losses and revisions to the previous # could all play a part in market reaction to it. Today's ADP report came in at -371k.

 

[bbmac]

Th 6th Aug 09

The 1hr screenshot below is the updated current position as I see it in respect of previous obvious near-term imbalances of supp/dem (swing hi's) and dem/supp (swing lo's) and unbreeched fibs/trend lines on this t/f.

The unbreeched fibs are drawn from 6471,6693 and 6888 to 7041, yesterday's hi.

As usual, I will be looking for repeating reversal and re-entry (after a pullback)set-ups on the lower sub 1hr t/f's with a price action trigger, in those zones and also 1min re-entries (after pullback) into any 5min (+) trend that may develop per overall price action -peak/valley analysis @ potential sbr/rbs zones on the 5min.

Early market commentary below;

0702 GMT [Dow Jones] Sterling might gain some support against the dollar later Thursday if the Bank of England chooses not to extend its quantitative easing program. But UniCredit says that would simply present a nice opportunity to sell. Go short above 1.70 in GBP/USD, the bank says. Now trading at 1.6979. (KJM)

G/L

 

[bbmac]

market uncertain atm

Ranging conditions per overall price action-peak/valley analysis, 5min-30min (arguably 1hr) perhaps anticipating the 12noon Boe/Mpc announcemnet re rate and any further Qe moves .

30min shown below;

G/L

 

[bbmac]

1hr triangles currently

1hr currently in 2 x triangle formations, a being the top of the triangle with b and c being the bases of 2 x triangles.

G/L

 

[bbmac]

15min triangle

The 15mnin too has formed a triangle, may be worth considering buying the close of a perfect bullish/bearish thrust outside of the triangle, if it develops. I will judge it on it's merits if it happens and not already in a position.

G/L

 

[bbmac]

market commentary

0816 GMT [Dow Jones] The big question for sterling Thursday is the BOE and what they do with QE. Barclays Capital says the most positive result for the pound would be a 'hard halt' to QE where the bank announces it is either done, or expected to be done, however, this result is highly unlikely. Any increase or extension of QE, especially after strength seen in UK data and sterling would likely see the pound take an initial hit. The more difficult outcome would be if the BOE announces a small extension but indicates that it would be done shortly. This would likely produce a knee-jerk negative sterling reaction, which could offer a strong buy opportunity says the bank. GBP/USD now at 1.6987. (GST)

 

[bbmac]

market commentary

LONDON (Dow Jones)--Key currencies have held steady in European trading hours, with investors bracing for key event risks from U.K. and euro-zone central banks later in the day.
The Bank of England is due to announce the results of its monetary policy meeting at 1100 GMT, while the European Central Bank makes its announcement at 1145 GMT, with a press conference starting at 1230 GMT. In the absence of key data in the runup to those events, major currencies showed few signs of life for most of the trading session, with the euro shifting little from the $1.44 area, the dollar straying little from Y95 and sterling tucked just under $1.70.
This period of calm could prove to be short-lived. In particular, the Bank of England's announcement seems set to shift the pound around, whatever the outcome.
No one expects the BOE to move policy rates from their current record low at 0.5%. But economists are split as to what the central bank will do with its quantitative easing program.
It has several options, each of which is likely to provoke a reaction in the currencies market. It could, especially given a run of positive U.K. data Wednesday, judge that it doesn't need to make any more asset purchases, at least for now - an outcome that would likely boost the pound as investors bet that the U.K. is set to leap out of recession.
It could, on the other hand, increase its asset purchases - most likely by GBP25 billion over the next month to a total of GBP150 billion. That would likely prompt sterling selling, at least in the short term.
Barclays Capital said the trickiest option for the market to read would be a smaller-than-expected increase to the easing program, with indications that it might halt purchases soon. "The knee-jerk reaction would probably be sterling negative, but this could be a strong buying opportunity," the bank said.
For the European Central Bank, again, economists expect no change in the key policy rate at 1%. However, traders will be scrutinizing the ECB's press conference for signs that the central bank may be considering withdrawing liquidity from the financial system. With data mixed, and with comments from the ECB largely indicating that the central bank is waiting to see the full effects of its asset purchases so far, a shift is seen as unlikely.
"If one was looking for a reason to expect further upside momentum in the euro [against the dollar], today's ECB meeting is unlikely to be it," said analysts at Societe Generale in a note to clients.
The bigger risk, perhaps, is that the ECB could signal unease over the euro's recent climb.
"Recent euro strength has not been a welcome development for the region's manufacturers and a more dovish tone, or even outright reference to undesirable euro strength, could put more downward pressure on the euro," said analysts at UBS.

-By Katie Martin, Dow Jones Newswires; 44 20 7842 9346; [email protected]