GBP – Time To Buy The Range?

Its a Saturday night (yes I’m doing analysis on weekend. Gota stay ahead of the game) and I’ve looked at my chart that compares GBP vs EURO, USD & JPY (That is the chart you can see above) and if I look correctly we’ve had a nice double top formation that was a perfect example of when to sell.

Now if we follow the flow of the chart we can see that since around the middle of August we had a nice break out to the upside and then we had a very slow downtrend to find some support. But take note of what we did next we decided to range before we see a breakout in around December to take for them highs and then we ranged again and then we went for a breakout for another high setup. Now we’ve formed a double top witch to me normally implies we need a pullback to generate a nice buying pool so we can take a go at the high again.

The main reason I could see us ranging is due to the pattern formation on this chart. Also, the dollar seems to be finding support here and there with dollar squeezes and due to Brexit and how that is treating GBP. GBP seems to be on a knife edge and any bad news about Brexit can easily turn a nice interday uptrend into a sell-off.

So with the dollar squeeze and euro gaining some traction via Brexit talks and bad news we could see a range trade set up. I won’t be posting levels on G/U or E/G or G/J until the market opens on Sunday night. Want to see what levels present them selfs from the market open.

GBP/USD – Range Trade Starting?

Some simple support and resistance lines for GBP/USD. From looking at the chart and how we’ve been trading in the past we could see a drop below the 1.37290 handle before we start to see a range trader confirmation.

As you may be able to identify from the chart above GBP/USD has a habit of range trading before there is a decision this, of course, is largely due to the dollar index also range trading as there isn’t any clear direction indication.

We can use past history to give us some indication of how events will turn out.

Range Trading – If we keep seeing dollar squeezes with Euro weakness then cable should be able to keep its ground and we will identify within the range

Break For Lower Levels – If a dollar squeeze turns into good dollar support and momentum and we see euro strength due to Brexit negotiations not going the way they should this could spark a big G/U sell-off down to the mean level (SMA 100).

Break For Higher Levels – If we see a repeat of how the dollar has been acting (ranging before the dollar index breaks down) and we have good Brexit negotiation news then we could see a spark for the high level of 1.45. Even if we see bad Brexit negotiations we could still see G/U head towards 1.45/46 just down to the dollar weakness.

FOMC Day

We’ve got FOMC today. Bloomberg cover 6 things to watch out for. You can read this below.

Here are some levels that have been presented them self today.

GBP/USD: 1.41203 has been seen as a good interday support zone. We could see a uptrend towards the week high of 1.42126. If we see the level of  1.42125 and it becomes a support zone this could be another push for the 1.43 handle.

EUR/USD: is fighting with the weeks high at the moment. 1.23974 has accted as the interday support zone. it’s also the daily piviot point. If 1.24600 acts as a support we could see E/U taking another go at the month high of 1.25374

USD/JPY: Is on a downtrend at the moment. Support has been found at 108.275 with a week resistance of 109.199. If U/J can’t brake the week resistance of 109.199 i could see a downtrend towards the 107.327 level.

The Federal Open Market Committee meeting this week is likely to reinforce the baseline expectation of three hikes this year thanks to a more upbeat outlook for the U.S. and global economies, and somewhat diminished concern about “lowflation.”

Specifically:

  1. Rather than be deterred by the headline miss on the first estimate of fourth-quarter gross domestic product growth reported Jan. 26, Fed officials are likely to welcome the data’s relatively strong internals, particularly those regarding investment and consumption. Indeed, the latest numbers will be seen as adding to a more general string of solid economic reports, both for the U.S. and for the rest of the world.
  2. This synchronized pickup in global growth, along with increased comfort with the inflation dynamics, will solidify the previous baseline guidance of three 25-basis-points hikes in 2018, with the first likely to take place in March. The recent depreciation of the dollar also contributes to this outlook. Indeed, compared with last year, market and Fed expectations for the annual path of rate hikes are on track for a much earlier convergence.
  3. Although some observers and market participants may also be tempted to alter the balance of risks to the upside — that is, to expect four rather that two hikes in the event the current baseline fails to materialize — the Fed will see the two-sided risks as balanced for now.
  4. There is unlikely to be anything new or notable about the balance-sheet reduction plan. The previously announced timeline won’t be revised or even highlighted in any major way. Meanwhile, more general exploratory discussions about frameworks and targets are likely to proceed gradually, with the aim of ensuring continued effective baseline management and exploring contingencies, resilience and reactions in the event of unanticipated adverse shocks.
  5. With a successful steady-as-it goes monetary policy in the U.S., more attention will need to be devoted to the economic and market impact, including on U.S. interest rates and other market valuations, of the actions likely to be taken this year by the Bank of Japan and the European Central Bank in response to better-than-anticipated developments in their economies. But Fed deliberations on these matters are unlikely to be publicized in any notable fashion.
  6. Finally, this will be Chair Janet Yellen’s last FOMC meeting, and she is likely to receive lots of accolades from her colleagues. Working collaboratively and effectively with other Fed governors and regional presidents, she has engineered an ongoing “beautiful normalization” — that is, a gradual, cautious and sequential exit from years of unconventional monetary policies that has neither disrupted markets nor derailed growth. The new Fed chair, Jerome Powell, is well placed to build on and successfully extend this achievement.

Source: Bloomberg

Todays Charts – 25/01/2018

Today is going to be intresting for sure. We’ve got the ECB minimum bid rate and then after the ECB Press Conference.

Capture

GBP/USD – Seems to be just following the uptrend. E/G is keeping a lid down on G/U as EURO has strengh from the dollar weakness.

EUR/USD – We are getting signs for a uptrend but anything could happen with the ECB only hours away.

EUR/GBP – It seems to be finding a bottom and then retracing and then dropping again due to GBP strengh. E/G is a chart that will go crazy when EBC data is released.

USD/JPY – It’s just following the downtrend. Looks set to bottom out close to 108 or top of the 107 handle.

USD/CAD – We’ve got CAD data later on so we could see another drop on U/C

GBP/JPY – If the pound is strong the trend is stop and towards the the top.

EUR/JPY – Keep a close eye on this chart. We’ve currenty using last months high as a supprt at 135.507

Today’s Charts

U/J has hit the Month low and some. GU is hovering at the Month HIGH and EU is hovering below Month High too. DXY broke down into the 90 handle during asia trading i see.

GPB/USD – Make sure to keep a eye on this chart. We could be set for a retrace is DXY bracking below the 90 handle is acting as a good support area for buyers to get in to give DXY a little push.

EUR/USD – Same as GBP/USD also depending

EUR/GBP – Depending how it’s reacting will give you a indication on how EUR or GBP will react if DXY Brakes even lower.

USD/JPY – We have hit Month Low and more in Asia session trading. I woudn’t even attempt buying U/J it’s a sellers market 108.22 would be a good buy in area 😉

GBP/JPY – This all depends on the stregh of the GBP. Keep a eye on E/G to indecate the streth of GBP

USD/CAD – We’ve hit week low so get ready for a small retrace and a drop again if DXY brakes down more.

GBP/USD – 19 Month HIGH!

GBP/USD made a 19month high breaking that post Brexit resistance. I had G/U lined up to hit 1.45 by August (we could be there a lot sooner).
 
Don’t mistake this for GBP strength it’s the opposite. The GBP and EUR rally is simply due to the USD weakness. So be careful as if USD gains some strength it could spark a sell off on GU etc.
 
Also keeping a close eye on the 90 dollar index. a break to the upside could cause a short squeeze in USD and a break to the downside could spark a fresh round of USD selling

GBP/USD – Levels For The Week Ahead

As you can see from the chart above GBP/USD managed to stay just above the 1.38552 handle during the Market open and the AUD & Asia trading.

We may see a stedy up strend towards the 1.40 handle. There isn’t any news today so it’s a slow Monday. This is trading so anything can happen. So be on your toes ready for a push or a big retrace if any bad Brexit news may appear.

Levels to keep an eye on are.

1.39190, 1.38179, 1.37312

GBP/USD – Friday Breakout?

We can see on GBP/USD that we’re staying just below the 1.39 handle. This identifys there is enough volume to keep GBP/USD near the 1.39 handle. But there isn’t enough volume there to push GBP/USD though past 1.39.

Saying this we’ve seen a clear attempt at breaking the 1.39190 resistance on GBP/USD. I do suspect we’re looking for a breakout during the London sesson today (in 6 hours of writing this post).

GPB/USD – Break For 1.40/41?

As you can see from the chart below. We’ve had a break for the high tops. We’ve also got a nice bottom red candle that shows major support.

We do have USD news today. But with the dollar being weak we may see no effect in traded agaisnt USD pairs. The USD news that we have are Building Permits.

The GBP/USD rally does seem to be there. Be carful today as a range trade between 1.39426 and 1.37921 is a posabilty.
GBP/USD Trade Idea:

TP: 1.40187
SL: 1.37967

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GPB/USD Trade Idea

Here is my trade idea for GU for today.

TP: 1.38992
SL: 1.37368

We can see that we’ve had the continuation of the uptrend. Due to the dollar not gaining any strength this week so far we can still see the GBP & EUR rally happening. Yesterdays down just seems to be a better buy area for us buyers to take up to the 1.39 handle