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GBP/USD to the highest level since Brexit vote

GBP/USD rose to the highest level (1.4375) since Brexit vote yesterday before pulling back below 1.435, the 50.0% retracement of the 2014 - 2016 decline. 1.43 is the immediate support and the next one at 1.425. Plenty of economic data coming in from U.K. this week will keep traders involved.
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GBP/USD on the highest level since Brexit vote

GBP/USD surged 200 pips on Friday, closing the week on the highest level since Brexit vote. General U.S. dollar weakness and Spain and Netherlands supporting softer terms for actual Brexit were the main drivers. 1.3835 and 1.40 are the next targets. CPI and Retail Sales reports next week are the key U.K. data releases to watch in the week ahead.
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Pound skyrockets after hawkish BOE

A hawkish hold by the BOE yesterday took many by surprise. Interest rates and voting pattern were left unchanged, as expected, but the minutes revealed that the majority of MPC saw as likely some withdrawal of monetary stimulus over the coming months, provided that economy continues on its current path.
Having been already in a firm uptrend, GBP/USD took the decision in a stride. It gained almost two cents on the day and so far added a good cent this morning. The pair is currently trading at the…
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Cable to recover in the weeks ahead

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Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
The declining wedge that Cable carved out during the past three years was pierced on both sides in one of the most volatile weeks in the pair's hist…
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al_dcdemo 17 Апр.

UPDATE 6: Better than expected data from China, released overnight, hasn't had a great impact but it did contribute to a slightly better risk sentiment. Australian and New Zealand dollars remain in a near-term uptrend while yen put in at least a temporary top. A quiet European session is the most likely scenario with main financial centers closed for Easter Monday. Some more activity is possible in N.A. session but many participants will prefer not to involve until tomorrow. That does not rule out a surprise move though.

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al_dcdemo 18 Апр.

UPDATE 7: Some pairs traded as if there were no holiday yesterday. GBP/JPY buying was perhaps the most notable. After the break below 136.45 last week, the pair was bought up 137.15 as risk sentiment improved, leaving a reversal candle on the daily chart. That helped to buoy GBP/USD which rose 75 pips to above last week's high but was unable to breach pre-Article-50 high (1.2615) which is now reinforced by 200 DMA. 1.27 - 1.28 area is the next target if only 1.24 - 1.25 holds as a support.

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al_dcdemo 19 Апр.

UPDATE 8: U.K. PM May called a snap election yesterday and the pound rallied in response. Even though this means more uncertainty in the short term, it is expected to give the government a confidence vote and enough time to focus on Brexit negotiations and implementation. Cable posted a huge candle on the daily chart. Some consolidation or correction is possible in the days ahead. December high (1.2775) could be the first stronger support. If the rally continues, 1.30 is the next target.

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al_dcdemo 23 Апр.

UPDATE 9: U.S. dollar recorded a mixed last week. It rose against yen, Canadian dollar and Australian dollar but fell against euro, franc, sterling and New Zealand dollar. The moves didn't have a lot to do with the U.S. itself but happened against a backdrop of unwinding of the Trump trade. Focus will be on Europe in the week ahead with French election 1st round results to start with and then the ECB meeting on Thursday. Advance version of the U.S. GDP on Friday will be an important data point to watch while the BOJ is not likely to stray from its course.

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al_dcdemo 30 Апр.

UPDATE 10: Story from the last week continued this week. The dollar declined against European currencies and appreciated against yen and commodity currencies. Market-friendly result of the first round of the French election didn't impact this dynamic, although better risk sentiment usually means weaker euro and franc, and stronger Aussie and Kiwi. Looking ahead, FOMC meeting may not leave us any wiser next week. After weak U.S. Q1 GDP, NFP report for April seems more important. Of course, all eyes will be on French election polls to see whether Le Pen could gain any ground.

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Cable may challenge the downtrend in the weeks ahead

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Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
The declining wedge that Cable carved out during the past three years was pierced on both sides in one of the most volatile weeks in the pair's hist…
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al_dcdemo 11 Март

UPDATE 6: U.S. dollar extended its gains this week in most major currency pairs as a rate hike by Fed and a potentially steeper tightening path is getting discounted. One exception was the euro which gained on the back of constructive tones from ECB and less chances of Le Pen victory in French election. Next week's calendar features three central bank meetings (Fed, BOE, SNB), U.S. inflation, Australian jobs and New Zealand GDP. If FOMC fails to hike on Wednesday, the dollar would sell-off hard. To avoid disturbance, a hike is almost a certainty. "Sell the fact" reaction possible.

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al_dcdemo 18 Март

UPDATE 7: As widely expected, FOMC hiked federal funds rate corridor by 0.25%. It was a "dovish hike", accompanied by caution on the part of the committee and the governor Janet Yellen. Despite that, the tightening cycle will continue at a gradual pace and market currently expects two more hikes this year. U.S. dollar sold off in response but I don't think the weakness will last. Lower-yielding currencies in particular seem vulnerable as the U.S. dollar bulls will inevitable return. However, the period of exceptionally low global interest rates may be drawing to an end.

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al_dcdemo 25 Март

UPDATE 8: The dollar recorded another mixed week. Its losses were the most pronounced against lower-yielding currencies while it ended up higher against the commodity block. In other markets, oil fell as gold rose which may be indicative of traders adjusting for a somewhat weaker recovery and a shallower tightening path. U.S. Administration pulled back from its attempt to repeal Obamacare on Friday and said they will instead focus on tax reform. That adds some uncertainty and, likely, volatility to the quarter-end flow driven week ahead.

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al_dcdemo 28 Март

UPDATE 9: Major currencies started the week on a firm footing, particularly against the U.S. dollar. The reserve currency fell in response to Obamacare vote failure which means that the Administration will have more difficulties implementing its reforms. Euro trade above 200 DMA yesterday for a couple of hours before pulling back. Yen tested 110 around the same time but it too recovered to be back above 110.5. Pound rose to the highest (1.2615) since early February. More short-covering is expected as Article 50 gets triggered tomorrow. Commodity currencies look heavy.

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al_dcdemo 2 Апр.

UPDATE 10: The correction in the dollar that gained pace after the dovish hike by Fed appears to have stalled, despite signs that U.S. Administration will have tough time enacting some of its promised reforms. U.S. dollar rose the most against euro and franc but recorded only modest gains compared to yen and antipodean dollars. Pound and Canadian dollar were holding its own, both finishing a tad higher. In the week ahead, FOMC Meeting Minutes may reveal some detail behind the March's decision. Most Fed officials have continued to be hawkish though.

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Cable to remain well bid in February

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Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
The declining wedge that the Cable carved out during the past three years was pierced on both sides in one of the most volatile weeks in the pair's…
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al_dcdemo 11 Февр.

UPDATE 6: U.S dollar rose against most of the major currencies last week. It snapped the multi-week decline against euro, franc and New Zealand dollar. Gains were more modest against yen, Canadian dollar and pound. Australian dollar was the only major currency to record a narrow win. Unless Trump starts pushing in the direction of a weak dollar policy, and perhaps even, the dollar should strengthen against low-yielders over the medium term. That said, it will be difficult to meet many market participants' expectations of at least two rate hikes by the Fed this year.

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al_dcdemo 17 Февр.

UPDATE 7: Cable is still pretty much disconnected from the U.S. dollar trade as it consolidates near 1.25. Lower highs and higher lows are evident and the breakout, to either direction, will be the stronger the more time will elapse by then. Depending on how you draw the trendlines, the support comes in near 1.24 and the resistance near 1.2525. I'd say a break to the upside is more likely but 1.26 or 1.265 could prove to be a near-term cap. In any case, 1.25 continues to serve as a good bull/bear line in sand.

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al_dcdemo 18 Февр.

UPDATE 8: It was another week of relatively tight ranges. With exceptions of yen and maybe pound, major currencies ended the week pretty much where they started. There's still a lot of uncertainty regarding tax cuts and fiscal stimulus in the U.S. but inflation is rising and Fed rate hikes are on the way. One thing that keeps bulls cautious is the Administration's remarks about too strong a dollar and Trump's comments regarding a "level playing field for currencies". The other one is simply expectations of reflation with flows into riskier assets and currencies.

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al_dcdemo 25 Февр.

UPDATE 9: Indecision in markets continues. Major currencies mostly closed in the middle of their tight ranges. A mild risk-off has been notable with the yen buying gaining traction, in part due to French election hedging. Speculators are building longs in commodity currencies and covering shorts in low-yielders bar the euro. The main event in the week ahead is U.S. president Trump's speech to Congress, in which he is expected to announce his "phenomenal tax plan". Failure to meet market's expectations could see the dollar sell-off hard.

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al_dcdemo 28 Февр.

UPDATE 10: Major currencies opened the week on a similar note that they ended the last one. The U.S. dollar started on the back foot but stormed back later in the day. Month-end flows and some position-squaring ahead of the important Trump speech tomorrow could be in part responsible for this. Euro, yen, cable and Canadian dollar have seen the most activity while franc and antipodean dollars have traded in tighter ranges. GBP/USD staged a fake upside break and then a fake downside break of the triangle on D1. The pattern may resolve to the downside.

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Cable to start 2017 in sideways mode

Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
The declining wedge that the Cable has been carving out during the past two years has been pierced on both sides in one of the most volatile weeks …
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al_dcdemo 16 Янв.

UPDATE 5: Major currency pairs opened with gaps. The U.S. dollar generally opened higher, up 10 to 30 pips. The exception is the yen, which gapped about 10 pips higher, in a risk-off fashion. The outlier is the pound which opened 180 pips lower after the prospect of a hard Brexit came again to the fore over the weekend. It's a calendar-heavy week ahead, which features central bank meetings from the ECB and the BOC plus speeches from Carney, May and Yellen and other Fed members. We'll see whether the U.S. dollar correction will continue or the bullish trend will reassert itself.

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al_dcdemo 21 Янв.

UPDATE 6: U.S. dollar generally moved lower against major currencies this week. The exceptions were the yen, which was sold on rising U.S. bond yields, and the Canadian dollar which went down on BOC Poloz's remark that a rate cut remains on the table. The best performer was the pound, which rallied after May's soothing rhetoric on what was previously viewed as a "hard" Brexit. Donald Trump officially became the 45th president of the United States on Friday. His first actions will be the market's focus in the week ahead.

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al_dcdemo 23 Янв.

UPDATE 7: Sentiment from the last week continues as the U.S. dollar starts the week on the back foot. What started as a normal pullback appears to be morphing into a medium-term correction. Three rate hikes this year, as some Fed officials have been touting, seem a bit far-fetched. I'm thinking two at the most which may be closer to what the majority of market participants expect. Losses against the yen and the pound are the most pronounced today but the dollar has started to claim back some ground it had lost during the Asian session trading.

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al_dcdemo 28 Янв.

UPDATE 8: It was a lacklustre week for the dollar but the corrective momentum appears to have run out of steam, particularly against the euro, the franc and the yen. Commodity currencies generally performed better but the Australian dollar is finding it diffucult to sustain gains above 0.75. The pound took 100 DMA for the first time since the Brexit vote. Next week will be a big one with three central bank meetings (Fed, BOJ, BOE) and plenty of U.S. data, including Nonfarm Payrolls. Trump's actions will remain closely monitored.

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al_dcdemo 30 Янв.

UPDATE 9: U.S. president Trump issued an executive order on immigration late on Friday (early Saturday in Europe). The order led to some chaos in airports in the United States and overseas, and prompted protests and legal action. The dollar gapped lower at the open and continued to trade south in the first part of the Asian session. The impact was most visible in the risk sensitive yen while the antipodean dollars were barely moved due to Chinese Lunar New Year holidays. Cable rose about half a cent but stalled ahead of the big figure at 1.26.

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Cable to recover some more in December

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Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
The declining wedge that the Cable has been carving out during the past two years has been pierced on both sides in one of the most volatile weeks i…
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al_dcdemo 9 Дек.

UPDATE 5: U.S. dollar is poised to close the week higher against the euro, the yen, the franc and the pound. The Canadian dollar is easily the best performer this week, owing to pullback in yield differentials and higher prices of oil. The antipodean dollars will close the week marginally stronger. Risk-on trades woke up after ECB decision but have remained cautious ahead of the FOMC meeting next week. A rate hike of 25 basis points is virtually a done deal. The market will focus on the rate statement, dot plots and economic projections to gauge the tightening path in 2017 and beyond.

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al_dcdemo 17 Дек.

UPDATE 6: The reaction after the Wednesday's FOMC decision was telling. The jump in bond yields and the surge in the U.S. dollar showed that the markets were priced for a more gradual tightening path than implied by the latest dot plot. Yellen's endorsement of the dot plot was another contributing factor. Even though it may seem that the dollar moved too far too fast, the rally looks very strong and I think we haven't seen the top yet. With this kind of momentum it is possible that the usual year-end thin holiday liquidity will mean more volatility rather than range-bound action.

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al_dcdemo 20 Дек.

UPDATE 7: GBP/USD has been grinding ever so slowly higher since the flash crash in early October. The pair has been supported by easing of Brexit rhetoric, better than expected macroeconomic data and, not least, GBP/JPY buying. Cable is currently stalling just below 50 DMA. A convincing break would target November low (1.23) and the post-flash-crash consolidation (1.22). 1.25 is the current bull/bear line in sand. A break and hold above may lead to a retest of 100 DMA.

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al_dcdemo 24 Дек.

UPDATE 8: Liquidity and volatility both fell ahead of the holiday season. U.S. dollar strengthened against the pound and commodity currencies, weakened against the yen, and remained unchanged against the euro and the franc. If the past week was of some example, the week ahead should be even more quiet. But I wouldn't bet on it because I think some of the recent moves have further to run and many will not be patient enough to wait for the New Year to get on board of them. Year-end position-squaring coupled with low liquidity will produce a couple of moves in any event.

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al_dcdemo 31 Дек.

UPDATE 9: The final week of the year was a pretty calm one if we exclude the spikes in euro and franc on Friday - already thin early Asian session liquidity was further diluted due to holidays and a large-sized order took out weaker hands. The U.S. dollar ended the week mostly lower, in part also due to bulls booking profit at year-end. Many countries are observing a holiday on January 2nd but I'm sure not everyone will wait until the 3rd to place their first trade. Market themes remain firmly in place and that could mean a volatile start to the new year.

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