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GBP/USD to consolidate near 1.40 level

al_dcdemo Posted 27 Mar. as Analysis on GBP/USD, Target: 1.4075, Date: 1st of May, 12:00 GMT  in #Technical analysis #GBP/USD #Daily Chart #Weekly Chart #Technical Tools #Net Short Positioning #Brexit #Seven Year Lows #Hedging Supply
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
Cable broke 2015 low in the first trading week of the year. The pair bounced off of the support line that connects 2004, 2005, 2011 and 2013 lows tw…
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al_dcdemo 11 Apr.

UPDATE 5: Major currencies opened the week mostly with small gaps against the U.S. dollar and then went pretty much sideways from there. Chinese CPI and PPI reports came in largely as expected. Yen did make a new marginal high (USD/JPY low) but then consolidated too. U.S. Q1 earnings season starts after today's market close, so a bit of position squaring in risk sensitive pairs would not be that unexpected.

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al_dcdemo 12 Apr.

UPDATE 6: Cable has been range-bound between 1.40 and 1.45 for the most of the past month and a half with price spending most of the time within inner, 1.41 - 1.44, range. If we exclude late February / early March dip, the pair has been carving out a declining wedge since mid January. Helped by better than expected inflation report the pair surged to 1.4350 but then reversed and is now back under 50 DMA which is running at the midpoint of the aforementioned range. I expect the pair to stay in this mode for now.

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al_dcdemo 13 Apr.

UPDATE 7: While commodity currencies already had a great couple of days, low-yielders such as euro, yen and franc remained supported up until today. Positive risk sentiment finally impacted them as well while the dollar strengthened across the board. U.S. (Core) Retail Sales and (Core) PPI reports and especially BOC meeting later in the day are definitely factors behind some position adjustments - particularly in commodity pairs which have become a bit extended, technically.

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al_dcdemo 24 Apr.

UPDATE 8: First quarter turmoil seems like a distant memory now as most commodities and equity indices turned up. Central banks (ECB, BOJ, PBOC, RBNZ, ...) that acted or didn't act (Fed) earlier in the year are claiming some of the credit for the positive developments but the main driver seems to be recovering oil. U.S. dollar indeed strengthened across the board last week but another theme was yen weakness and appreciation of risk sensitive pairs.

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al_dcdemo 25 Apr.

UPDATE 9: With the exceptions of the pound and the Canadian dollar, which were the strongest currencies last week, the U.S. dollar opened with a small gap higher against major currencies. Interesting and potentially lively week ahead will feature Fed, BOJ and RBNZ meetings, U.S., E.U., U.K. and Canadian GDP reports, Australian quarterly inflation report and plethora of central bank speakers.

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GBP/USD to fall further as investors hedge Brexit risk

al_dcdemo Posted 28 Feb. as Analysis on GBP/USD, Target: 1.3725, Date: 1st of April, 12:00 GMT  in #Technical analysis #GBP/USD #Daily Chart #Weekly Chart #Technical Tools #50 Day Sma #Net Short Positioning #Brexit #Seven Year Lows
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
Cable broke 2015 low in the first trading week of the year. The pair bounced off of the support line that connects 2004, 2005, 2011 and 2013 lows bu…
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al_dcdemo 17 Mar.

UPDATE 5: Contrary to what many market participants expected in light of strong employment and inflation readings in the U.S., the Fed were surprisingly dovish at their yesterday's meeting, citing global economic developments as main risk. Cable rose 150 pips in the two hours after the release which added to 220 pips from the day's low. 50 DMA is the immediate resistance with last week's high (~1.4435) the next target. 1.40 support remains firmly in place as Brexit worries seem to subside somewhat.

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al_dcdemo 19 Mar.

UPDATE 6: Surprisingly dovish FOMC spurred a U.S. dollar sell-off in which commodity currencies benefited the most. Cable so far gained about three and a half cents. It also had a positive effect on U.S. stocks with the S&P 500 and Dow Jones indices turning positive on the year. Given that the next candidate meeting for raising rates is not before June and even raising then is under question, the current U.S. dollar pullback is set to continue.

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al_dcdemo 25 Mar.

UPDATE 7: Good Friday and Easter Monday holidays will make this weekend four days long instead of usual two days. Even though U.S. resumes trading on Monday, full participation is not expected until Tuesday. We've already been witnessing low liquidity and volatility. Both shall remain on low levels during this period, though there's always possibility of a sharp move in these conditions.

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al_dcdemo 29 Mar.

UPDATE 8: Despite Brexit talk on the weekend, Cable opened near Friday levels and rose 50 pips in the morning. After a small pullback it surged another 120 pips in the afternoon, helped by weaker than expected U.S. spending data. The pair stalled ahead of 50 DMA (currently ~1.4270), which is the level to watch in the day ahead. 1.42 shall now hold as a support if this rally still has some legs. Upside may be limited though.

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al_dcdemo 31 Mar.

UPDATE 9: Tomorrow is NFP day and, following recent dovish turn by the Fed, I would expect more U.S. dollar losses on weaker than expected report than gains on a better than expected report. If I'd have to guess, I'd say we would get overall slightly better than expected report. Price action would depend on the pair, but would probably involve taking out stops on both sides with the dollar ending up near unchanged on the day.

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