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Cable to remain well bid in August

al_dcdemo Posted 27 July as Analysis on GBP/USD, Target: 1.3225, Date: 1st of September, 12:00 GMT  in #Technical analysis #GBP/USD #Daily Chart #Short Squeeze #Rising Channel #Weekly Chart #Technical Tools #Net Short Positioning #Neutral Boe
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 below a declining wedge in one of the most volatile weeks in the pair's history as U.K. opted out of E.U. A flash crash in October 2016 …
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al_dcdemo 19 Aug.

UPDATE 6: The week was to some extent a reversal of last week's risk-off moves. Canadian and Australian dollars were beneficiaries with yen and franc recording just marginal losses. It was not a good week for European currencies. Pound was the loser of the week while euro remains to be buoyed by dip buyers. Next week will be a quiet one data-wise. All eyes will be on Jackson Hole Symposium at the end of the week, which will feature speeches by Yellen and Draghi. Rumours go that the ECB president will avoid talking monetary policy. That will increase volatility if he does say something.

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al_dcdemo 24 Aug.

UPDATE 7: Price action has been pretty sedate so far this week with most major currencies sitting near the middle of their weekly ranges. Euro and Canadian dollar are the only two that are marginally better than the U.S. dollar. There has been a little bit more action in the New Zealand dollar but selling stalled ahead of the strong support at 0.72. Tomorrow could prove to be the most lively day of this week with German Ifo Business Climate, U.S. (Core) Durable Goods Orders and Day 2 of the Jackson Hole Symposium which will bring Fed Chair Yellen and ECB President Draghi speeches.

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al_dcdemo 26 Aug.

UPDATE 8: Speeches by Yellen and Draghi at Jackson Hole Symposium largely met expectations. Yellen didn't even talk about monetary policy while Draghi avoided giving any new information on what the ECB may do in autumn. Lack of hawkish clues from Yellen were enough to send the U.S. dollar lower across the board and then later some upbeat comments from Draghi (even though he warned about inflation not yet being self-sustained) propelled the euro to a new two-year high. Yen, pound and Australian dollar were flat on the week while New Zealand dollar was the laggard.

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al_dcdemo 31 Aug.

UPDATE 9: U.S. dollar index broke to the lowest level since 2015 on Monday before staging a sharp pullback. That coincided with euro breaking above 1.20 and 2012 low (1.2040) and franc below 0.95. Yen was once again contained by the strong support at 108. Kiwi is out of favour ahead of N.Z. general election. Canadian dollar sold off hard yesterday but already recouped all losses and some after strong Q2 GDP figure. Australian dollar has been the least volatile of the bunch but with some impressive reversals. NFP report tomorrow will be a nice finale to this exciting week.

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al_dcdemo 1 Sep.

UPDATE 10: U.S. labour market report for August fell short of expectations on most metrics. August is historically weak with regard to NFP figure but Wednesday's strong ADP figure gave dollar bulls some hope that this time was different. It wasn't and the immediate reaction was to sell the dollar. The report itself was not great but was solid enough and subsequent price action seemed to agree. The dollar ended the week higher against euro, franc, yen and New Zealand dollar, and lower against pound, Canadian dollar and Australian dollar.

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Cable may continue to drift lower for some time

al_dcdemo Posted 22 June as Analysis on GBP/USD, Target: 1.2575, Date: 1st of August, 12:00 GMT  in #Technical analysis #GBP/USD #Daily Chart #Short Squeeze #Rising Channel #Weekly Chart #Technical Tools #Net Short Positioning #Neutral Boe
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 below a declining wedge in one of the most volatile weeks in the pair's history as U.K. opted out of E.U. A flash crash in October 2016 …
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al_dcdemo 15 July

UPDATE 5: It was a worst week for the U.S. dollar in a while. It all started with the BOC decision on Wednesday after which Canadian dollar surged about 200 pips. The next day, Aussie and Kiwi played catch-up and rose about 100 pips respectively. Eagerly anticipated U.S. inflation and retail sales reports came in weaker than expected yesterday and exacerbated dollar losses across the board. Cable sliced through 1.30 to 1.3115, the highest in ten months. Euro had tough time holding above 1.14 but ended the week near the high, poised for a break higher. Exciting week ahead.

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al_dcdemo 23 July

UPDATE 6: U.S. dollar ended another week of underperformance, falling against all major currencies bar the British pound. Euro confirmed break above 1.1450 to trade to the highest since mid 2015. Mirroring its cousin, Swiss franc closed the week below 0.95. Yen was bought down to 111. Canadian dollar extended its rally to approach 1.25. Australian dollar broke above 38.2% retracement of the 2014 - 2016 downswing. New Zealand dollar closed the week near 0.7450, just below the 50.0% retracement of the 2014 - 2015 decline. Momentum suggests further losses for the dollar in the week ahead.

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al_dcdemo 24 July

UPDATE 7: A mixed start to the week saw yen, pound, Canadian dollar and Australian dollar extend gains while euro, franc and New Zealand dollar are lagging. Data-wise, it's a quiet one until Wednesday when Australia publishes inflation data, U.K. releases preliminary GDP and FOMC concludes its meeting. U.S. reports durable goods orders on Thursday and GDP on Friday. Unless FOMC pulls a surprise, neither of these events has the potential change the current macroeconomic landscape. U.S. politics seems a more likely source from where some kind of a twist may come.

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al_dcdemo 27 July

UPDATE 8: Yesterday's reaction to the latest FOMC statement was quite strong for a meeting without press conference. The statement didn't divulge anything new but clearly the market was expecting something more hawkish. The committee indicated that it will begin with balance sheet adjustment "relatively soon". The language on inflation, however, has deteriorated a bit and that was probably the main reason the market sold the dollar. While balance sheet adjustment is now virtually a done deal, we may see further hikes in federal funds rate only if inflation picks up.

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al_dcdemo 31 July

UPDATE 9: Last week was an interesting one. Major currencies traded to fresh highs against the U.S. dollar. The single exception was Swiss franc which sold off strongly against all those currencies, including the dollar. Two cent and a half surge from sub 0.95 to above 0.97 might well have had SNB backing. There's nothing on the calendar for the week ahead that has the potential to reverse the current U.S. dollar weakness. Perhaps a concerted dovish effort from RBA and BOE could put a dent into this trend but most likely not for too long.

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Cable to remain in 1.25 - 1.30 range for now

al_dcdemo Posted 27 May as Analysis on GBP/USD, Target: 1.2725, Date: 3rd of July, 12:00 GMT  in #Technical analysis #GBP/USD #Daily Chart #Short Squeeze #Weekly Chart #Technical Tools #Net Short Positioning #Neutral Boe #Medium Term Bottom
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 below a declining wedge in one of the most volatile weeks in the pair's history. A flash crash in October 2016 briefly sent it below 1.2…
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al_dcdemo 10 June

UPDATE 6: It was a mixed week for the U.S. dollar. The No.1 reserve currency finally got some traction against European currencies. Dovish ECB and U.K. voters, going against PM May's and indeed market expectations, contributed fundamental background for the technical weakness to play out. The dollar was flat against the yen and the Canadian dollar but it fell short compared to the Antipodean currencies. Next week brings four major central bank meetings, namely Fed, SNB, BOE and BOJ. The Fed is widely expected to hike interest rate corridor by further 25 basis points.

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al_dcdemo 15 June

UPDATE 7: The FOMC was surprisingly hawkish yesterday. They hiked federal funds rate by 25 basis points, as expected, and outlined strategy for reducing their balance sheet. FOMC chair Yellen told reporters that the balance sheet adjustment could begin "relatively soon". Just a couple of hours before the FOMC decision, both inflation and retail sales reports came in weak and markets sold U.S. dollar on speculation that the FOMC will postpone hiking until data improves. The dollar recovered and followed through today.

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al_dcdemo 23 June

UPDATE 8: Cable had a pretty volatile week. It started with an outside down day on Monday. On Tuesday the pair fell more than a cent, after Carney uttered his "now is not time to raise rates". Then on Wednesday it snapped back after BOE dove Haldane revealed that he nearly voted for a hike. Thursday was a sideways (accumulation?) day and the pair extended gains today, touching 1.274 shortly after London open. 1.265 - 1.27 should attract some buyers if this rally is to continue. 1.275 - 1.28 is where sellers may be lurking.

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al_dcdemo 24 June

UPDATE 9: Currency markets were relatively sedate this week. Major pairs traded in 100-pip ranges with exception of Cable whose range exceeded 200 pips. With no big events on the agenda until September, it's possible that we'll be seeing somewhat slower activity throughout the summer. That said, there's always opportunity in at least some pairs and timeframes, and we must always expect the unexpected. Central bank speakers will continue to dominate in the week ahead and markets will be positioning for their next moves in the coming weeks.

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al_dcdemo 29 June

UPDATE 10: Cable jumped a cent yesterday after BOE governor Mark Carney's commented that "some removal of stimulus likely to be needed as spare capacity erodes". There was some follow through overnight. U.S. dollar weakness across the board helps to sustain those gains. The pair is trading just below 1.30 big figure level which is the initial target ahead of May high near 1.3050. A break above that is not all that unlikely in the days ahead. 1.29 - 1.2925 should hold if this rally still has some legs.

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Cable to see some further upside

al_dcdemo Posted 27 Apr. as Analysis on GBP/USD, Target: 1.2975, Date: 1st of June, 12:00 GMT  in #Technical analysis #GBP/USD #Daily Chart #Short Squeeze #Weekly Chart #Technical Tools #Net Short Positioning #Flash Crash #Neutral Boe
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 below a declining wedge in one of the most volatile weeks in the pair's history. A flash crash in October 2016 briefly sent it below 1.2…
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al_dcdemo 12 May

UPDATE 5: BOE QIR didn't bring anything new. The market was perhaps a bit disappointed that Kristin Forbes remains the only hawk on the MPC, and she is leaving. The bank is optimistic on the Brexit process but prepared to adjust policy both ways. Cable fell 50 pips on the release and another 30 during the press conference but 1.2830 - 1.2850 has so far held. If that goes, 1.2750 - 1.28 is where some demand may come in. 1.29 is the initial resistance before 1.2950 - 1.30 band.

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al_dcdemo 14 May

UPDATE 6: Widely expected result of the French election spurred a pullback in euro and franc and, to a lesser extent, yen. U.S. dollar indisputably won the week, rising against all G10 currencies. Weaker than expected inflation and retail sales reports on Friday led to some profit taking but June rate hike expectations hardly budged. Some further reaction to the reports is possible in the days ahead. Following a neutral BOE QIR, U.K. data will be closely watched next week. Australian labour force report and Canadian inflation and retail sales are also at the top of the list.

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al_dcdemo 21 May

UPDATE 7: In what was its worst week of the year, the dollar lost ground against every G10 currency. Already soft start to the week after last Friday's inflation and retail sales reports was exacerbated by the political drama in the U.S. that has further shaken traders' confidence that the Administration will be able to deliver on its stimulus promises in due time. The biggest winners were euro and franc with Canadian dollar and pound not far behind. U.S. dollar index fell to the levels not seen since the U.S. election and closed the week near the low.

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al_dcdemo 25 May

UPDATE 8: As expected, FOMC meeting minutes didn't reveal anything particularly new. Weak Q1 GDP was dismissed in favour of strong employment growth. There was some caution regarding inflation by some members but was not a baseline view. The committee also discussed balance sheet reduction which could be seen as a hawkish development. Minutes are basically data two weeks old and the market responded with U.S. dollar selling. It's Fed speakers and how they will shape expectations for a June hike that the market is focused on.

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al_dcdemo 29 May

UPDATE 9: Last week was better for the dollar as it managed to rise, albeit marginally, against euro, franc, yen, and Australian dollar. Pound sold off after election polls showed PM May lost some support. Canadian dollar capitalized on oil strength, even though OPEC didn't go out on a limb this time around. New Zealand dollar continued its snap-back after bottoming near 0.685. European flash CPI and U.S. NFP report will be two events that the market will closely watch this week. Both have the potential to shape upcoming ECB and Fed decisions.

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Cable snaps back to 1.25

al_dcdemo Posted 8 Feb.  in #Trader's blog #GBP/USD #Support #Resistance #Short Squeeze #D1 Chart #Reversal Day
Cable staged a sharp reversal day yesterday. It fell 130 pips in European session and then rose 200 pips in North American session as shorts were squeezed and bottom pickers stepped in. Hawkish comments from BOE's Forbes and May's remarks on partnership with China were cited as fundamental drivers.
After trading below 1.25, 50 DMA and 100 DMA intraday, the pair closed the day above all three. The moving averages are the first stronger support levels to watch while the big figure could be used as…
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Cable slows into 1.30

al_dcdemo Updated 10 Aug.  in #Trader's blog #Boe #Nfp #GBP/USD #Fake Breakout #Short Squeeze #D1 Chart
Cable has looked heavy since last Thursday's BOE meeting. Friday's NFP report didn't do it any favours. The pair has posted five consecutive down days since last Wednesday.
That said, bears were not really convincing so far this week as was not yesterday's (fake) breakout below 1.30. A sustained hold below the big level will be needed or else we may see a larger short squeeze.
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USD/JPY to continue lower after a retracement

al_dcdemo Posted 27 Mar. as Analysis on USD/JPY, Target: 111.25, Date: 1st of May, 12:00 GMT  in #Technical analysis #Abenomics #USD/JPY #Daily Chart #Short Squeeze #Support Zone #Weekly Chart #Technical Tools #Sideways Trading
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 pair broke below strong 115.50 - 116 support zone that was holding it since late 2014. Sharp decline has seen 100 week SMA taken out before it …
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al_dcdemo 8 Apr.

UPDATE 5: Beginning of a new month, quarter or year is often accompanied by a start of a larger move, be it continuation or reversal. Yen gained about five cents against the dollar so far this month (and quarter) with USD/JPY falling from ~112.55 to ~107.65. 38.2% retracement of the Abenomics upswing (~106.65) is the first major support level to watch before 200 month SMA (~105.85) and 105 big figure level. Area between broken 110 level and previous range bottom up to 111 shall provide solid resistance in the event of a deeper correction.

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al_dcdemo 11 Apr.

UPDATE 6: Major currencies opened the week with small gaps mostly 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 13 Apr.

UPDATE 7: While commodity currencies already had a great few 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 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 several central bank speakers.

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USD/JPY to continue lower after a retracement

al_dcdemo Posted 28 Feb. as Analysis on USD/JPY, Target: 111.75, Date: 1st of April, 12:00 GMT  in #Technical analysis #Abenomics #USD/JPY #Double Bottom #Daily Chart #Short Squeeze #Support Zone #Weekly Chart #Technical Tools
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 pair broke below strong 115.50 - 116 support zone that was holding it since late 2014. Sharp decline has seen 100 week SMA taken out before it …
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al_dcdemo 18 Mar.

UPDATE 6: Post-FOMC U.S. dollar selling continued yesterday and on some pairs even exceeded the initial (Wednesday) move. One of those pairs was USD/JPY which fell to the lowest level since October 2014 and it is rumoured that the BOJ have intervened in the market to stem the decline. 110.65 is the low from yesterday. 110 is the first major support level ahead of 38.2% retracement (~1.0675) of the Abenomics uptrend. 112 - 112.50 shall now act as a decent resistance.

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al_dcdemo 19 Mar.

UPDATE 7: Surprisingly dovish FOMC spurred a U.S. dollar sell-off in which commodity currencies benefited the most. USD/JPY so far lost about two 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 23 Mar.

UPDATE 8: Reaction in the stock markets and risk sensitive currency pairs to yesterday's attacks in Brussels so far suggests that this kind of event was basically priced in, which is not surprising given the number of prevented attacks in recent months. USD/JPY dipped about 75 pips in the immediate aftermath of the news but soon went sideways above 111.50. It climbed 80 pips in the U.S. session, taking out the European session high, but stalled ahead of 112.50.

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al_dcdemo 25 Mar.

UPDATE 9: 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 such conditions.

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al_dcdemo 31 Mar.

UPDATE 10: Tomorrow is a NFP day and, following recent dovish turn by the Fed, I would expect more U.S. dollar losses on a 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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Did the BOJ do enough to support USD/JPY?

al_dcdemo Posted 31 Jan. as Analysis on USD/JPY, Target: 120.25, Date: 1st of March, 12:00 GMT  in #Technical analysis #Abenomics #USD/JPY #Daily Chart #Bounce #Short Squeeze #Support Zone #Weekly Chart #Technical Tools
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

Strong 115.50 - 116 support zone has been holding since late 2014. 100 week SMA will lend it additional support, should that be required. 50 week …
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al_dcdemo 9 Feb.

UPDATE 4: Quiet start to the week turned into carnage soon after European session got underway, led by stock market falls. The selling continued in North American session and, after a small consolidation, overnight. The greatest beneficiary of safe haven flows has unsurprisingly been the yen, while the euro and the franc have also benefited. Gold rose to the highest in eight months. Cable and commodity currencies lost to various degrees, not least as a consequence of cross pair selling.

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al_dcdemo 10 Feb.

UPDATE 5: Yen strength has been one of the main stories this year. After unsuccessful attempt by the BOJ to stem its appreciation, yen buyers returned with force in February. The pair (USD/JPY) is down eight cents in the first eight trading days of the month. It has broken below strong 115.50 - 116.00 support (now resistance) at the start of the week, held near 100 week SMA (~115) for two days and then continued below 23.6% retracement of the 2011 - 2015 rally today. October 2014 high near 110 is the next major target.

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al_dcdemo 18 Feb.

UPDATE 6: FOMC Meeting Minutes, which were released yesterday evening, didn't provide us with anything new. Officials did acknowledge increased downside risks to inflation outlook stemming mostly from USD strength and oil weakness but didn't back away from rate hikes. Reaction to the release was muted. Price recorded a couple of small whipsaws before returning to what it was doing before - a pattern that is quite prevalent with these releases.

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al_dcdemo 19 Feb.

UPDATE 7: Following some stabilization in world stock and commodity markets and overall improvement in risk sentiment, volatility in major currency pairs fell. The pairs mostly end the week not very far (~100 pips) from their opening levels but the ranges are still decent (100 - 300 pips). Whether is this just a temporary calm remains to be seen as global macroeconomic landscape remains largely unchanged.

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al_dcdemo 27 Feb.

UPDATE 8: Friday provided everything that dollar bulls want. Mostly better than expected readings on growth, inflation, income, spending and sentiment were enough to send the dollar higher against most major currencies and showed that March hike cannot be ruled out. Yen lost about a cent on the day with the daily range worth half a cent more. The pair closed a hair below the high.

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Cable gives back gains

al_dcdemo Updated 1 May  in #Trader's blog #GBP/USD #Cable #Rally #Short Squeeze #Shooting Star #Manufacturing Pmi #UK Election
It turned out that a rally in Cable in the beginning of the week was just a massive short squeeze as the pair turned lower yesterday and continued today after much weaker than expected Manufacturing PMI.
It posted long shooting star on the weekly chart, which implies further losses in the week ahead. That scenario is now strongly supported by weaker fundamentals and UK election to come next week is not helping it either.
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Nihad 3 May

Nice post, but beware this week of the Sterling, the next will be a jump over the creed. The Springboard is working fine in bracketing, but I think its the last bottom spring touch. This negative sentiment on the Sterling is a diversion to wait and see the election result next Thursday. And suddenly, everything in the UK will be positive and you will just notice it at the 1.56 level.

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Nihad 3 May

To sum it up, SHORTING the cable for a revisit to the 1.45 is a huge loss, the same way people I know shorted the EURO @ the 1.08 for a revisit to the 1.04, as the so-called Analysts were advertising the idea of the 1.00 figure, what happened since then, while people got distracted it boomed to the 1.12, a gain of 80 points(800 pips). Now, you will think many times before going Long again on it at this level. QE was the reason for the Euro and the Yen, but what was it for the Sterling?. Take a look at the Cable two weeks before Scottish Independence and see where was the Cable.

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al_dcdemo 4 May

I'm bullish Cable, especially if US data continues to disappoint, but I think it will retest 1.50 and perhaps run stops below it, before continuing higher.

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