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0.8300 Target On the cards for EURGBP! Have a look at the above image (EURGBP M TF CHART): It was crucial that the monthly candle close convincingly below monthly 0.8500 psychological support. Support break and confirmation would likely lead this pair towards the swing low (0.8300) Now looking at the main chart (WEEKLY TF EURGBP), we can clearly see that the price is in a descending channel and likely headed towards 0.83000 level in the near future. However for every trade. a trader needs to evaluate the ideal entry point, SL and TP so that the risk reward ratio aligns in our favor. In this case as per the confluence factors on the chart below are the ideal entry instructions: TP: 0.83000 (swing low) SL: 0.87000 (swing high/channel high/W & M 50 EMA) IDEAL ENTRY TO HAVE 1:1 RR: 0.850000 So as we can see, for this trade to have ideal RR, we need the price to retrace towards 0.8500 level before we can make a short entry. We could see this happen this week as major banks have policy announcement which could make the EURO gain as its too oversold!. This could be a great opportunity to await deeper retracement and have a better RR for this trade. THIS JUST REPRESENT ONE OF MY ANALYSIS AND ITS NOT A TRADE SIGNAL. SIGNALS ARE USUALLY POSTED ONCE THE CRITERIA MEET IN A NEW POST WITH COMPLETE INSTRUCTIONS
Short
by FX618Analysis
GBP/JPY - Time for a correction?The pound has made some incredible moves against the yen in recent weeks, following the breakout from long term consolidation through the top of the descending triangle, after which it surged to more than five-year highs. The rally in the pound has been driven by rapidly shifting interest rate expectations, with markets now pricing in four or five rate hikes by the end of next year in order to combat very high inflation, which is expected to peak above 5% and average 4% over the next 12 months. Naturally, when compared to the yen where interest rates have been rock bottom for so many years and the prospect of that changing looks slim, it's easy to see why the moves in this pair have been particularly powerful. But the pair now finds itself in an interesting position. So much is now priced in for the Bank of England, arguably too much, that should it follow that path, traders appear to be of the view they'd be committing a policy mistake which they'll be forced to reverse. So barring another unexpected spike in inflation, or a sudden burst of economic activity that looks unlikely given the squeeze we're seeing from various sides, what exactly is going to deliver those further sterling gains? That's not to say it isn't possible, particularly against the yen, but the opposite may be more likely after such an extraordinary run if we do see expectations pared back a little, even some profit-taking on those earlier moves. The 4-hour chart may give an idea of what's to come. The consolidation pattern we're currently seeing isn't perfect. There appears to be support around 156 but it's not completely clear. Alternatively, it could be trading in a descending channel, a sign of consolidation. A significant break of 156 may indicate a broader correction, while a break of the channel would suggest it's quite a strong move. A move above the channel would suggest the pound has new life and sight set on those recent highs.
by OANDA
2
#EURGBP Upside + Fundamental driversHello Traders! Early rate hike priced in for the pound, that may not come as soon as expected. So we can see an overstretched position also if we see more vix upside along risk off sentiment that supports the trade as well. Euro (EUR) Fundamental Bias: Weak Bearish Primary Driver: 1. The Monetary Policy outlook for the ECB Rationale: The ECB provided an overall balanced policy decision at their September meeting. They chose to slow the pace of asset purchases, explaining that the current levels of financial conditions allow them to buy assets under PEPP at 'moderately' slower pace compared to the pace of purchases seen in Q" and Q+. However, as expected, the bank made it vers clear that the move was not tapering it was merely a recalibration of purchases (when you plan to perform less QE that's technically tapering but who's counting).The bank raised their inflation projections for 2021, 2022 and 2023, and even though the 2021 projections were arquablynot as high as the markets were hoping for, the more important me-term projections still showed inflation moving to well below the banks 2% target to affirm the transitory view of recent price measures. All in all, the decision was broadly balanced and as a result failed to inspire any meaningful reaction in European assets. For this weeks upcoming meeting, the markets are not expecting any fresh changes as all eyes are on the December meeting. Primary driver: 2. The country's economic developments Rationale: Earlier issues with vaccinations and lockdowns at the start of 2021 weighted on eu growth prospects, with growth differentials against the US an UK still quite wide, despite some of the recent some of the recent strong economic data. Despite the hit to growth, the recent activity data suggests the hit to the economy from recent lockdowns weren't as bad as feared. That alone isn't enough to change the current bearish outlook. Another factor to watch is the discussions among European states to allow the purchase of green bonds not to count against budget deficits. Such a decision could change the fiscal picture drastically and we would expect that to be a big positive for the EUR and European equities. However, in the short-term, EUR traders will be firmly fixing their eyes on the ECB, which is expected to be a bit of an uneventful meeting. Primary driver: 3. Funding Characteristics Rationale: An interesting driver for the euro is its funding characteristic exhibited during risk off sentiment. AS a low yielder ( like jpy and CHF ), the European has been an interesting choice among the carry trades, especially during 2019 it was favoured against high yield EM currencies, and part of the big upside in the euro during the initial risk off scare in march 2020 was attributed to an unwind of large carry trades. recently we've seen the euro exhibit some resilience during jittery risk tones despite usd strength. As more central banks start normalising policy, the euro's attractiveness as a funding current ycould keep it pressure din the med term vs higher yielders. However, it could spark risk off upside if some of those trades unwind. That doesn't make our a safe haven, but as rates climb globally it can become more sensitive to risk. Primary driver: 4. CFTC Analysis Rationale: Latest CFTC data showed a positioning change of +6291 with a net non-commercial position of -12107. The stretched positioning for large speculators we noted the past few weeks have continued to ease, but net shorts are sizable for leveraged funds. Thus, we would not be interested in chasing the euro lower from here without seeing a more mean reversion first. Great British Pound (GBP) Fundamental Bias: Bullish Primary driver: 1. Monetary policy outlook for the BOE Rationale: The SEP policy meeting from the BoE saw money markets rushing to price in a much faster and more aggressive policy path than previously expected. Even though this course falls in line with our bullish bias for the pound, we do think the market is a bit too aggressive too quick right now. The bank did explain that they now see inflation above 4% by Q4 of this year, and the possibility of more sticky inflation was the key reasons why we saw a 7-2 QE vote split with Saunders and Ramsden both dissenting to cut purchases. However its important to note that the remaining 7 members still see inflation as transitory, and the fact that this expect CPI above 4% means any prints that don't come close to that poses downside risks. Furthermore, even though the bank said their expectations of modest tightening has strengthened. the admitted that lots of uncertainties remain.A big one of these is the labour market, where even though the number of furloughed staff have decreased, that decrease has materially slowed from august which poses more uncertainty for the labour market. Thus, even though our bias remains unchanged, and we see the bank lifting rates Q', we do think the over optimistic moves in the money markets poses sort term headwinds. Primary driver: 2. The country's economic developments Rationale: The successful vaccination program that allowed the UK to open faster and sooner than peers provided a favourable environment for sterling and the strength of the economic recovery has meant solid growth differentials favouring GBP. However, a lot of these positives are arguably the same outperformance we saw earlier. With out above comments about money markets, it also means that there is now more risk to the downside surprises then was the case a few months ago. Primary Driver: 3. Political developments Rationale: Even though a Brexit deal was reached last year, some issues like the Northern Ireland protocol remains, and with neither side willing to budge it seems like these issues. On Friday, the EU ramped up some political posturing with report that said they are mulling róterminating the BREXIT deal if the UK triggers Article 16. For now, these are just threads, but with rates markets still very aggressively priced any further escalation could increase the odds of seeing repricing downside in the GBP, so one to keep on the radar after Friday. Primary Driver: 4. CFTC Analysis Rationale latest CFTC data showed a positioning change of +13594 with a net non commercial position of + 1615. Sterling have been a very impressive rebound from recent lows as market s reacted positively to recent BOE comments which sparked additional downside in SONIA futures, which are now fully priced for 15-basis point hike in Q! and about three 25-basis point hikes by end 2022. Even though GBP has enjoyed upside on the tightening expectations, the reasons why markets are pricing ia steeper rate path is out of fear of inflation and not due to a more positive economic outlook, which as we highlighted above does pose headwind for the Pound in the weeks ahead if growth of inflation data surprise lower in the weeks ahead. Have a great week! Vitez
Long
by Vitezabraham
4
Pound yawns after mixed UK dataThe British pound continues to have an uneventful week and the lack of activity has continued in the Friday session. GBP/USD has been trading close to the 1.38 level for most of the week and is currently at 1.3804, up 0.09% on the day. UK Retail Sales declined by 0.2% in September. This is a cause for concern, given that retail sales have now declined for three straight months, pointing to ongoing weakness in consumer spending. Retail sales remain subdued despite the relaxation of Covid restrictions in July, which has not resulted in consumers increasing their spending. On a positive note, retail sales remain above the pre-pandemic levels (February 2020). There was better news from the September PMIs. Both the manufacturing and services PMIs accelerated and beat expectations, with readings of 57.7 and 58.0, respectively. This points to strong expansion in both sectors. The markets have priced in a November rate hike, likely by 15 basis points. Although this would be a relatively small increase, it would mark the first rate hike by a major central bank since the Covid pandemic began. BoE Governor Andrew Bailey is poised to raise rates in order to curb inflation, which is running above 3%, well above the bank's target of 2%. A majority of MPC members are expected to follow suit, but a vocal minority of members are warning that the move is unwarranted and could dampen the recovery and hurt growth and jobs. On Thursday the US posted strong employment, manufacturing and housing numbers, which gave the US dollar a much-needed boost. The dollar index continues to trade in a range between 93.50 and 94.00 and is at 93.67 in Europe. A drop below 93.50 could see the index fall to the 0.93 line. On the technical chart, the upside shows a triple top at 1.3830. A close above this line would leave the pair room to climb until resistance at the round number of 1.3900. There are support levels at 1.368 and 1.3492
by OANDA
1
GBP/USD - Long term consolidation?The next few weeks will be interesting in GBPUSD with the pair seeing the currencies of two central banks intent on tightening going head to head. This is perhaps why it has entered into broad consolidation with the pair once again failing to make a new low, despite breaking back below the 200/233-day SMA once more. The pair rotated strongly off 1.3750 over the last 24 hours but it's already seeing some support. While 1.3750 falls just short of the 50 fib on the 4-hour chart, another push higher would take it into really interesting territory, with the cluster of moving averages and 50/61.8 fib region being a massive test. A move above here could see consolidation continue, with 1.39 being a big test above here and then 1.40. A move above here would see if break out of the consolidation phase and potentially make much larger gains. Ultimately it may come down to which central bank is keener to tighten or, if the risks mount up, which will blink first. Until then, we may have to endure plenty more consolidation, at which point the moving averages on these longer time frames become less useful.
by OANDA
No Signs Of QE Tapering From The BoE Yet (06 August 2021)The BoE’s decision. As widely expected, the Bank of England (BoE) carried out no change to its monetary policy during its meeting yesterday. Interest rate remains at 0.10% with all eight voting committee members voting for no change. Quantitative easing (QE) remains at £895 billion in total. Michael Saunders, one of the hawks of BoE, voted for a reduction in government bonds purchase by £45 billion. Overall positive outlook of the UK economy in the near future. In the quarterly release of the BoE’s monetary policy report, the central bank said that the “impact of COVID on the UK economy fades further over time” although the Delta variant of the virus continues to spread in the UK. The confidence on the economic recovery led to the central bank’s positive revision of its economic projections. Economic Projections: For year 2021, UK GDP: 7.25 (7.25) CPI Inflation: 4.00 (2.50) Unemployment Rate: 4.75 (5.00) For year 2022, UK GDP: 6.00 (5.75) CPI Inflation: 4.00 (2.50) Unemployment Rate: 4.75 (5.00) For year 2023, UK GDP: 1.50 (1.25) CPI Inflation: 2.00 (2.00) Unemployment Rate: 4.25 (4.25) *Figures shown in parentheses refers to projections from May 2021 The BoE expects the UK economy to return to pre-pandemic level during the fourth quarter of 2021. As with the other major central banks, the BoE also felt that the recent rise in inflation is due to transitory factors. With the ceasing of the UK furlough scheme at the end of September, BoE Governor Andrew Bailey highlighted that unemployment was “no longer expected to rise”. He also mentioned that the challenge for the economy now is whether employers can fill up the job vacancies. On the matter of QE. Little was mentioned on QE during this meeting. The BoE said towards the end of its rate statement that “should the economy evolve broadly in line with the central projections in the August Monetary Policy Report, some modest tightening of monetary policy over the forecast period is likely to be necessary to be consistent with meeting the inflation target sustainably in the medium term”. The committee members also intend to start unloading the bond purchased by the central bank when interest rate has risen to 0.5% and will consider to do so actively when interest rate is at least 1%. According to the BoE, interest rate is projected to be at 0.5% by the third quarter of 2024. Hence, it is likely that the central bank will be holding on to its purchases at least in the near future. Interest Rate Projection: 2022 Q3: 0.2% 2023 Q3: 0.4% 2024 Q3: 0.5%
by GH_Lee
GBP/USD Analysis, Bulls vs BearsHello everyone, as we all know the market action discounts everything :) _________________________________Make sure to Like and Follow if you like the idea_________________________________ The GBP/USD has rallied a bit in the last few days where the Pair price jumped from 1.3571 to 1.3971, but the Bulls are struggling to pass the 1.39820 resistance line, if that would happen we could be seeing a big Bullish movement in the market price. The market is showing a lot of Bullish signs tho and is most likely to move in 1 out of 2 different ways in the next few days : Scenario 1 : The market price is trading near the resistance line at 1.39330, if a breakout happens the price most likely will be headed to the second resistance line 1.39820 where it will determine the outcome movement for this pair. If the Bulls were able to stay in control then it could be the beginning of a Good bullish movement. Scenario 2 : The market price is trading near the resistance line at 1.39330, if the bears were able to gain control then we could be seeing the price dropping to the first support line 1.38600 and then a battle will happen to determine the price movement, If the bears stayed in control then a Bearish movement could drop the price to the second support line at 1.37860 and that's were the main test between the Bears and Bulls will happen. Technical indicators are showing Bullish Signs as we see that : 1) The market price is above the 5 10 20 50 100 and 200 MA and EMA (Bullish Sign) 2) The RSI is at 55.37 showing great strength in the market and on its way to the overbought zone, and no divergences were found yet.(Bullish sign) 3) The MACD crossed the 0 line into a bullish state with a positive crossover between the MACD and the Signal line. (Bullish sign) 4) Bull/Bear Power is at 0.0083 (Bullish sign) Support & Resistance points : support Resistance 1) 1.3860 1) 1.3933 2) 1.3836 2) 1.3982 3) 1.3786 3) 1.4006 Fundamental point of view : The Bank of England (BoE) was pretty much as expected, with one dissenter and modest tightening seen over the forecasting period. GBP/USD saw a modest uplift in the immediate aftermath of the policy decision. The move was short-lived, however. In the view of economists at TD Securities, cable should remain fairly well-anchored around current levels. “The MPC voted to leave policy on hold today, with one dissent to reduce QE prematurely. There were two notable changes in the committee's communications: forward guidance was revised to acknowledge that some policy tightening would be appropriate by late-2024, and the sequence of tightening steps was revised, with a lower Bank Rate threshold to commence balance sheet runoff.” “While we would not be surprised to see an upward extension to test 1.3960, cable may struggle to advance much beyond 1.3985 without fresh catalysts.” “Solid support remains in place around 1.3875, with the 1.3835/1.3845 zone as the next attractor to the downside.” According to FXStreet This is my personal opinion done with technical analysis of the market price and research online from fundamental analysts for The Fundamental point of view, not financial advice. If you have any questions please ask and have a great day !! Thank you for reading.
by GabiDahduh
2
GBP/USD Daily Outlook: Hurry up and catch this opportunityThe GBPUSD pair has interestingly managed to break the recent range in order to retest a horizontal resistance area , despite risk-off supporting the US dollar and market worries over the delta virus variant. However, one thing to note here is that new cases are dropping in the UK and hospitalization rates remain low => GBP strength intraday. With the USD focused on the FOMC, where talks could point on tapering by year end or early 2022 (although the August Jackson Hole event could provide more details), the USD should remain well bid ahead of the FOMC. Risk-off, China-US tensions, and lower equities in Asia and Europe (despite strong earnings reports from last week) is another key indicator that supports my USD near-term bullish bias. Enough with fundamentals, let's take a look at the charts. How to trade the pair? The 1-hour chart shows bullish momentum diminishing in decreasing trading volume , and the RSI has formed a bearish divergence with today's high in the pair. The 61.8% Fib remains more or less in-tact (on higher timeframes, today's bull move looks like a wick), and a horizontal resistance area is there to provide another obstacle for buyers. A bearish engulfing pattern is forming right now, so you may still catch this trade. SL near the 78.6% Fib level, and TP near the lower 1.36xx levels (with scaling into the winning position on each lower low.)
Short
by MujkanovicFX
GBP/USD: Complete Weekly Outlook (July 12-16) 🔥My complete weekly outlook for GBP/USD. Leave me a comment on how you would trade the pair, and please hit "LIKE" and follow for more trade ideas like this. Thanks! FUNDAMENTALS: After reaching fresh 2-week highs on Friday, the GBPUSD pair fell sharply overnight as the US dollar firmed with higher UST yields. Markets remain cautious on GBP as the United Kingdom proceeds with their reopening plan, despite a surge in daily infections to around 31k. However, hospitalizations remain low, 90% of the UK population has covid-19 antibodies, and the country is also one of the leaders in vaccination rates. This supports my bullish bias in the currency for the week, assuming risk sentiment remains supportive and the USD continues to slide. Latest Headlines: USD News: - US Dollar Index Price Analysis: Recovery targets 92.85 - US futures mixed ahead of North American trading - Fed's Barkin: If labour market takes longer to recover, tapering goes a little later - Fed's Barkin: Labor market hasn't healed enough to taper bond buying – WSJ - US Dollar Index regains traction around 92.20 GBP News: - GBP/USD: Sterling set to suffer as “Freedom Day” may be less free than earlier anticipated - GBP/USD now targets 1.3900 and beyond – UOB - GBP/USD retreats from two-week tops, flirts with session lows near 1.3885-80 area - Pound Sterling Price News and Forecast: GBP/USD teases 1.3900 on softer USD, risk-on mood - GBP/USD teases 1.3900 on softer USD, risk-on mood - Pound Sterling Price News and Forecast: GBP/USD in a third week of declines? Delta, data and dollar Upcoming Market Reports: Here are the most important market reports for GBP/USD to follow in the coming days (all times are UTC timezone): Tuesday at 12:30: USD CPI m/m (Expected: 0.5% , Previous: 0.6% ) Tuesday at 12:30: USD Core CPI m/m (Expected: 0.4% , Previous: 0.7% ) Tuesday at 17:01: USD 30-y Bond Auction (Expected: , Previous: 2.17|2.3 ) Wednesday at 06:00: GBP CPI y/y (Expected: 2.2% , Previous: 2.1% ) Wednesday at 12:30: USD PPI m/m (Expected: 0.6% , Previous: 0.8% ) Wednesday at 12:30: USD Core PPI m/m (Expected: 0.4% , Previous: 0.7% ) Wednesday at 14:30: USD Crude Oil Inventories (Expected: , Previous: -6.9M ) Wednesday at 16:00: USD Fed Chair Powell Testifies (Expected: , Previous: ) Thursday at 10:00: GBP MPC Member Saunders Speaks (Expected: , Previous: ) Thursday at 12:30: USD Unemployment Claims (Expected: 350K , Previous: 373K ) Thursday at 12:30: USD Philly Fed Manufacturing Index (Expected: 27.8 , Previous: 30.7 ) Thursday at 13:15: USD Industrial Production m/m (Expected: 0.6% , Previous: 0.8% ) Thursday at 13:30: USD Fed Chair Powell Testifies (Expected: , Previous: ) Friday at 12:30: USD Retail Sales m/m (Expected: -0.5% , Previous: -1.3% ) Friday at 12:30: USD Core Retail Sales m/m (Expected: 0.4% , Previous: -0.7% ) Friday at 14:00: USD Prelim UoM Consumer Sentiment (Expected: 86.5 , Previous: 86.4 ) INTERMARKET: Yields: Yield differentials remain supportive for the pair due to the slide in US 2y yields over the last two weeks. This is a bullish sign for the pair. SENTIMENT: CoT: The GBP is one of the rare majors that saw an increase in positioning against the USD in the last week (along with the JPY). Net long positioning in GBP rose to $1.9 billion, but it's worth noting that fast money has reached a 12-month extreme, which poses a downside risk for the pound. Currency Strength Index: GBP is slowly building its bull trend while the USD remains somewhat flat against other majors for the last 6 trading days. Today, risk-off supported the USD and JPY overnight, but the picture is changing ahead of the NY open, with risk currencies (and the pound) recovering some ground and the USD retreating from daily highs. Risk Reversals: While risk reversals are still skewed to the downside, it's worth noting that GBP call options are recovering vs similar out-of-the-money put options, signaling that investors are increasingly protecting against higer prices in the pound. * Comment: In the FX market, risk reversals refer to the difference between the implied volatility of the most popular out-of-the-money calls and puts with the same expiration. Higher demand for an options contract increased its volatility and price. Therefore, a positive risk reversal signals that upside protection in the pair is relatively more expensive than downside protection, suggesting that investors are speculating on a rise in the currency. TECHNICALS Price-Action: GBP/USD broke above a bearish trendline and reached fresh 2-week highs, were sellers pushed the price lower overnight. The pair is now finding support at the broken trendline, near the 50% Fib level of the latest bullish impulse move and a horizontal support area. The short-term trend is turning bullish, but 1.3830 (and 1.3815, the 61.8% Fib) need to hold for buying opportunities to emerge. Pound pairs are famous for their deeper corrections, so the 61.8% Fib may be in play. However, risk tolerant traders may also use the 1.3830 level (which aligns with a horizontal support) to build their long positions. It's also worth noting that today's (Monday) bear run is accompanied with decreasing volume, signaling that a turning point may be near. Levels to follow (Liquidity): Major resistance: 1.3909 (weekly high) Minor support: 1.3815 (61.8% Fib) Major support: 1.3750 (weekly lows and daily trendline) == SUMMARY == UK's "Freedom Day" (July 19 when all restrictions should be lifted by the government) could provide further support for the pound despite higher daily infection rates. The number of hospitalizations and fatal outcomes has been greatly reduced, and the majority of the UK population has covid antibodies, which supports my constructive outlook for the pair. Pullbacks (like the one today) could be used to enter long in GBP/USD. Please hit the 'LIKE' button if you find this post useful. Also, don't forget to follow to get more trade ideas like this. Thanks!
Long
by MujkanovicFX
3
GBPUSD Strategy WeeklyA very similar example here in GBPUSD: Sellers surrendering control; buyers are seeking to restrict the flows with a very bullish close above 1.390x. Both sides are now locked and loaded; Sellers are so compacted from the five months of consolidation (securing a breach of the top of the range is what we are tracking here). After the Daily and Weekly close above 6th July highs, the HH is in, and technical damage should have been done. Sellers have their blockades up at 1.402x/1.403x which is the next target (a poor entry and risk to reward if you are not already in from last week). I mean taking 1.402x/403x would make it very difficult for sellers to defend and also open an attack to the 1.425x highs. On the other hand, a breakdown of the range from sellers would mark a very aggressive high. Finding the correct side in these flows is of utmost importance. To recap as quickly as possible.... We are tracking for continuing pressure on the 'early' sellers, another squeeze with a final move back towards the 1.425x highs later in the year, before we see a lot of profit taking and capital flight back to USD in 2022.
Long
by ridethepig
4
Double Bottom & SupportWith the 'surprising' threat on Dollar, it is rather easy to spot the flows here than one expects at first glance. The lust to expand in euro is perhaps the clearest of demonstrations of how things will follow for Pound and where the advance on this wing is not coming on the dollar side and those caught off-guard will be punished as we enter into summer months. The chain here demands little preparation, a breakout above 1.380x will send indications that the floor has arisen and put us back into the battlefield between our highs (1.422x) and lows (1.378x). This move from sellers is being nipped in the bud, the theoretical targets above are 1.403/1x which is our mid-point in the map, and, of course, the 1.422x highs. Prefer to be a buyer at these levels as long as 1.378x is holding.
Long
by ridethepig
8
Portfolio: Long EURGBPI am going long EURGBP at 86.00 with a stop loss at 85.20 and a target of 88.60 using 2% of capital. I have already articulated in both the latest chart packs that we are seeing pressure on USD and US10Y. This is a good example for us to use to highlight the slightly more cautious tone in GBP. This selloff looks like it has run out of steam around 0.853x and should begin accelerating towards 2021 highs at 0.922x once we break the channel resistance ahead.
Long
by ridethepig
3
GBP/USD Daily Outlook: Pound at the Mercy of the US DollarGBP/USD Daily Outlook. FUNDAMENTALS: The pound has held up against the USD fairly well as the UK government decided to further ease restrictions on July 19. This calmed market concerns over the new Delta virus variant and helped the pound limit losses against the US dollar. However, without any major domestic reports (except BoE Bailey's speech on Friday), the pound could be following the EUR and print further losses if the FOMC minutes charge the USD. Latest Headlines: USD News: - US Dollar Index clings to gains in the mid-92.00s, looks to FOMC - US dollar at the mercy of the market's take on FOMC minutes - US 10-year Treasury yields refresh 19-week low - US urges China, private sector to boost participation in G20 debt response GBP News: - UK June Halifax house prices -0.5% vs +1.5% m/m expected - GBP/USD now focuses on 1.3735 – UOB - Pound Sterling Price News and Forecast: GBP/USD remains depressed below - 1.3800 on Wednesday - GBP/USD teases 1.3800 amid risk aversion, FOMC minutes eyed Upcoming Market Reports: Here are the most important market reports for GBP/USD to follow in the coming days (all times are UTC timezone): Wednesday at 14:00: USD JOLTS Job Openings (Expected: 9.30M , Previous: 9.29M ) Wednesday at 18:00: USD FOMC Meeting Minutes (Expected: , Previous: ) Thursday at 12:30: USD Unemployment Claims (Expected: 345K , Previous: 364K ) Thursday at 15:00: USD Crude Oil Inventories (Expected: , Previous: -6.7M ) Friday at 10:00: GBP BOE Gov Bailey Speaks (Expected: , Previous: ) INTERMARKET: 2-year yield differentials remain neutral for the pair. UST yields move sideways ahead of FOMC minutes. SENTIMENT: Currency Strength Index: TECHNICALS The GBPUSD pair trades in a short-term downtrend after yesterday's strong sell-off, forming a consolidation this morning. GBP recovered some ground after attempting a break down below a bearish wedge on the 1-hour chart, with the 38.2% Fib level providing immediate resistance (1.3820). Markets are cautious ahead of the FOMC minutes which is reflected in the sideways trading in the pair. However, the most recent 1-hour candlestick (pinbar) suggests that sellers are still interested in shorting GBP at attractive levels. Levels to follow (Liquidity): Major resistance: 1.3850 (61.8% Fib) Minor resistance 1.3820 (38.2% Fib) Minor support: 1.3780 (daily low) Major support: 1.3730 (weekly low) == SUMMARY == I remain bearish on the pair based on the reasons mentioned above. Weekly low at 1.3730 might be within range after the FOMC minutes release. Please hit the 'LIKE' button if you find this post useful. Also, don't forget to follow to get more trade ideas like this. Thanks!
Short
by MujkanovicFX
2
What you need to know to trade GBP/USD next week. 📈How to trade GBP/USD the upcoming week? Let's find out. If you like this post, please leave a "LIKE" for support. Thanks! FUNDAMENTALS: Last week, the EU granted a delay to the chilled meat ban in Northern Ireland, which was one of the reasons for the pound to become quite resilient against most other major currencies, even against the USD bull. However, comments by Bank of England Governor Bailey who warned against a potential over-reaction to inflationary pressures put some selling pressure on GBP and lowered tightening expectations. Still, the resilience of the GBPUSD pair, despite the rising cases of the Delta virus variant in the UK, shows that markets are still expecting a strong economic rebound in the country. The US NFP beat estimates but a softer unemployment rate and unchanged wages encouraged USD bears to put some selling pressure on USD. The upcoming US Independence Day (US markets closed on Monday) and the recent USD strength also led to some profit-taking, which put further pressure on the USD. Overall, markets will likely continue to price-in a Fed rate hike due to the stronger NFP while shaking off the weaker unemployment rate and unchanged wages. With the GBP well supported in the previous period, despite the Delta variant spread and Bailey's comments, markets will likely stick to their bullish GBP bias. Latest Headlines: USD News: US dollar moving to new lows. Now the weakest of the major currencies US factory orders for May 1.7% versus 1.7% estimate US stocks are opening higher after less scary jobs report US Dollar Index retreats from tops post-Payrolls, back around 92.40 US Dollar Index Price Analysis: Next on the upside comes in 93.50 GBP News: Pound Sterling Price News and Forecast: GBP/USD approaching critical support UK PM Johnson: We have built up considerable wall of immunity in UK GBPUSD moves higher and looks to move back above the June low GBP/USD rebounds swiftly from 2-1/2-month lows post-NFP, upside seems capped Upcoming Market Reports: Here are the most important market reports for GBP/USD to follow in the coming days (all times are UTC timezone): Monday at 12:00: USD Bank Holiday (Expected: , Previous: ) Tuesday at 14:00: USD ISM Services PMI (Expected: 63.9 , Previous: 64.0 ) Wednesday at 14:00: USD JOLTS Job Openings (Expected: 9.34M , Previous: 9.29M ) Wednesday at 18:00: USD FOMC Meeting Minutes (Expected: , Previous: ) Thursday at 12:30: USD Unemployment Claims (Expected: 375K , Previous: 364K ) Thursday at 15:00: USD Crude Oil Inventories (Expected: , Previous: -6.7M ) Friday at 10:00: GBP BOE Gov Bailey Speaks (Expected: , Previous: ) INTERMARKET: The recent increase in UST yields on the hawkish Fed shift pushed the 2-year US/UK yield differentials lower. Pound bulls need to keep an eye on this divergence as global yield-chasing could lead to selling pressure in the GBP/USD pair. USD INDEX The fall in the US yield curve (bull steepener) after the US labor market report will likely be short-lived due to the hawkish Fed. All eyes will be on the FOMC meeting minutes on Wednesday, especially on the arguing of the seven hawks who voted for a rate hike in 2022 on the Fed dot plot. In the short-term, the picture looks bearish as the USD Index also broke below a rising trendline (next support at 91.50). SENTIMENT: CoT: Hedge funds and other leveraged money increased their bearish GBP bets while long positioning remained almost unchanged. It's important to note that bullish bets are near 12-month extremes, or at least near the 90 percentile. USD positioning (according to the USD value of contracts in other currencies) lies near short extremes. Even though bullish positioning increased in the previous week, there is still a possible risk of a short squeeze. This suggests that market positioning is somewhat bearish for GBP/USD. Currency Strength Index: Looking at the currency strength chart for the last 4 days, the USD sell-off on Friday pushed the USD significantly lower while the GBP remained almost range-bound. The fall in US yields across the board could lead to a short-term correction in the USD, although - as mentioned earlier - I believe that markets will continue to price-in a rate hike for 2022 (the FOMC meeting minutes on Wednesday will be a key event for this.) TECHNICALS The GBPUSD pair broke above a bearish trendline on the 1-hour chart after facing some support at a long-term (daily) bullish trendline. The intraday bull run on Friday was accompanied by a surge in trading volume, signaling further upside potential during the next week (especially in combination with the picture in the USDx and US yields.) Levels to follow (Liquidity): Major resistance: 1.4000 Minor resistance: 1.3870 Minor support: 1.3815 Major support: 1.3730 == SUMMARY == I am short-term mildly bullish on GBP/USD. Please hit the 'LIKE' button if you find this post useful. Also, don't forget to follow to get more trade ideas like this. Thanks!
Long
by MujkanovicFX
8
GBPJPY 1H Drop IncomingGBPJPY showed sharp gains on Mondays Asian and European sessions with the pair rising from a bearish 151.500 to 153.750 at its peak, looking primed to continue back towards the 155 mark which the bulls have been pressuring and sustaining since late May. Coming into todays European session, the currencies volatility had worn off and the pair has been stuttering early this morning in the mid 153 range, this could be the bulls taking a breaking on the resurgence ready to make a move towards the day end, however the more likely situation is that the bulls are exhausted and so is the sterling. After posting great gains over the past few months the sterling has gone from strength to strength, no worse the Yen which has also showed remarkable strength and gains. The Former however is struggling to maintain this momentum and the pound has been slipping its grasp in the mid 155 range for a few weeks now. This could be down to the how well the Yen has performed but the pound's ground beneath its feet is slipping with Boris Johnson's delay of lockdown easing and the 'Delta variant' supposedly creating a whole new problem for the UK and its plans to get the economy back on track. With the Bank of Japan's monetary policy meeting minutes kicking off in the next asian session, we can comfortable predict how the Yen will react after seeing its response to previous BoJ announcements. This will push the Yen higher and ultimately leave the GBPJPY pair looking negative. The sterling has no key fundamental economic releases on the calendar till tomorrow which leaves the stage all set for the Yen in the next Asian session. This enforces my view on the pair slipping back down to the 152 ranges until the Pound takes centre stage tomorrow afternoon where we can see some volatility. On the Technical analysis side of things, we can see the trend angle of yesterdays resurgence as unsustainable as the pair has slipped so much and pops upwards too sharply to allow any support to be built beneath. It was met with resistance at 153.500 to 153.700 and is struggling to break its barrier. It's since slipped to 153.300 today and isn't showing strong enough signs of breaking the resistance. It may form some degree of support here but there's not enough data to show the pair will as its too short of the Mid may support level of 153.300. The pair has also dropped beneath the SMMA showing further signs of a drop incoming. I expect a drop to 152.500 and I'll check back in on the pair then to see how sterling and yen are fairing most likely after tonights Asian session. We may have another opportunity to catch the fall back down to the support of 151.400 but theres not enough signs for me personally that the pair can't rebound at 152 and head back upwards. I look forward to seeing how this one plays out.
Short
by KaineArkinson1
1
GBPJPY 1H Chart BoJ Interest Decision And Looking AheadGBPJPY fell this morning as the Asian session ended weary of the the BoJ's interest rate decision and release of Inflation YoY. This, coupled with the pair showing early signs of exhaustion is creating great weather conditions for a storm. The pair fell short of the 154.000 mark and looks to consolidate ahead of the BoJ's decision before a small breakout above the previous resistance line of 154.500 back in May, which was broken by the bulls as they headed for the psychological level of 155. This was broken easily and GBPJPY began testing 156. Since then GBPJPY has been on a slow downtrend in the hourly which showcased some of the early signs of exhaustion mentioned earlier. This is merely a break for the bulls as the markets watch and wait for the BoJ's decision. The pound has been holding its weight even after Johnsons announcement of the 'freedom day' delay back to the 19th of July. With the pound sitting strong amongst Johnsons delay and the Yen looking shaky ahead of the inflation and interest announcements, this only really shows to me that the test at 156 is coming thick and fast once the Yen's anticipation has decimated. Looking ahead into next week, after some stabilisation and consolidation from todays drop, we're gonna see the pair push past previous resistances such as 154 and the psychological 155 and begin testing the 156 mark. The pair might meet some resistance at around 155.500 due to the downtrend angle and resistance points but I'm not imagining its gonna dent the push that the currency will make over next week as there is little fundamental factors in play over the next week for GBP until Thursdays BoE interest rate decision which will look to follow Jerome Powells Hawkish decision to bring hikes in around 2023, and the Yen will look again weary as the holding their own meeting minutes early in the week. I look forward to hearing thoughts and I'm definitely riding with the bulls over the 1H frame this next week
Long
by KaineArkinson1
GBPUSD Bears Retain Control Following BOE's Policy Decision The Monetary Policy Committee (MPC) of the Bank of England expectedly maintained the near-negative Official Bank Rate unchanged at 0.10 per cent. The pound initially surged following the publication of the policy decision, but then the GBPUSD promptly retraced from the initial peak. The GBPUSD probed the lower boundary of the Distribution Area in the wake of the policy decision but then retraced back. Nevertheless, this uptick was created following an initial dropdown to 1.38600. The last candle's massive lower tail indicates uncertainty in the market and strong buying pressure just below the 100-day MA (in blue). The price action also appears to be strengthening above the 50-day MA (in green), which serves as a floating support. The rebound from the ascending trend line indicates that the GBPUSD is not yet ready to resume falling as the bulls retain control in the short term. At the same time, the consolidation below the Distribution Area implies that bullish commitment is not sufficient enough to initiate a new upswing. The prevailingly neutral market momentum is underpinned by the MACD indicator . Overall, the price action is likely to continue consolidating between the ascending trend line and the Distribution Area in the near future in an increasingly more pronounced bottleneck. An eventual breakout/breakdown away from the two would elucidate the next likely direction for the market.
Short
by Trendsharks
Breakout and reversal on GBPNZDIn April we saw a clear downtrend on GBPNZD. The pair couldn't make another lower low and it broke out. This gives us a trend reversal opportunities. Today is a very important day for the GBP due to BOE interest rate decision as well as the elections in Scotland. That means we will see big moves! If you don't want to take on any risk, then wait for a higher high! But if you're looking for a greater risk to reward ratio, then make sure to check out this opportunity.
Long
by ForexTrendline
BOE – What to expect – Bank of AmericaBank of America discussed its expectations for this week’s BoE meeting in a recent note to clients, arguing that risks are tilted to the upside. Bank of America explains: We expect the BoE to endorse market expectations of two rate hikes by end-2024 in this week’s monetary policy report… We look for the BoE to taper QE purchases at next week’s policy meeting. If not this week, then June. The risks of a more hawkish BoE should be supportive for GBP, but much of the heavy-lifting on UK rates was done through 1 Q. That the BoE could announce Asset Purchase Facility (APF) tapering should not come as a total surprise given its stated objective to extend purchases through to end-2021. How the BoE views the outlook beyond the expected sugar rush and its implications for the rate profile is arguably more significant for the pound.
by thunderpips
6
Chart of the day: Rates markets are pricing...Rates markets are pricing in faster policy normalization for the BOE With the Bank of England just a few days away, it’s always a good idea to reflect on the rates market and see what it’s pricing in. Looking at the SONIA quarterly futures rates we can see that markets are pricing in much faster policy normalization for the UK compared to the likes of the FED. SONIA futures are pricing in a first hike from the BOE by SEP 2022 (compared to March 2023 for the FED), and a total of 3 hikes (assuming 10bsp each) by March 2023. How does this information help us? It is helpful as it shows us a bit of a disconnect between the recent weaker price action, we’ve seen in sterling versus what the rates markets are implying for policy normalization. Thus, even though a lot of policy normalization expectations are baked into the rates market, the same is not reflected in sterling’s price action just yet. For now, consensus is not expecting the BOE to follow, the BOC’s lead by tapering asset purchases. But arguably the bigger focus will fall on the BOE’s rate hike projections.
CME:SONZ2021
by thunderpips