@faithmight, Author at FaithMight

November 4, 2013

GBP/USD Still In Range

For several weeks now, the $GBPUSD has been trying to either retrace to the 50% Fibonacci at 1.5850 or break out higher above 1.6250. Neither has happened as last week 1.6250 resistance capped any rallies and the 1.5900 support level that has emerged in recent weeks has buoyed dips.

This week opens with $GBPUSD again at 1.59 support unable to continue lower. Thanks to the better-than-expected manufacturing PMI release, this corrective rally should find resistance into 1.60 if price is to move lower and finally break the 1.59 support level.

The fundamental landscape remains positive for GBP. UK economic data is robust into the fall season proving to bulls that the summer recovery may actually have legs. After a quiet couple weeks, we get a slew UK data this week plus an interest rate decision from the Bank of England. While the market expects the BoE to remain on hold with monetary policy, data this week may cast the central bank in a hawkish light. Price moves will be sensitive to data releases into Thursday’s rate decision. Be mindful of the calendar and key levels this week.

October 24, 2013October 24, 2013

What Are The Markets Whispering for 2014?

I see 3 major trends for the markets next year in 2014:

Investing in Africa only accelerates
$GBPUSD enters 2014 at the bottom of its 5-year consolidation pattern (strong USD)
The rise of women in finance

Last Thursday, at Stocktoberfest, I presented 2 of the 3 ideas on a panel with Howard Lindzon, Chairman, StockTwits, Christopher Perruna, Director of Project Management at Gardiner & Capital Theobald, Greg Harmon, DragonFly Capital, Cole Wilcox, CEO Longboard Asset Management, and Mike Bellafiore, SMB Capital. Here is my presentation:

(Infographics credit)

October 23, 2013October 23, 2013

The Rise of Women in Finance

Enacted in August by India’s parliament, the Companies Act requires every listed company to have at least one female director within a year, while others reporting minimum revenue of 3 billion rupees ($49 million) have three years to comply.

Almost half of the top 100 companies traded on BSE Ltd., including the biggest two by market value, don’t have a single female member, according to data compiled by Bloomberg. As many as 6,000 women directors will be needed as firms look to fill the seats…

Just off the heels of Stocktoberfest where we heard about the rise of women in finance from DailyWorth’s Amanda Steinburg, Bloomberg breaks news of the Bombay Stock Exchange Companies Act. What excellent timing.

Read more: Women Sought on Boards as Stiletto Groups Grow: Corporate India (Bloomberg)

October 14, 2013October 14, 2013

Big Deal

Friday’s close below 1.60 is a big deal for bears. It marks its first close below 1.60 after rallying for nearly 4 consecutive weeks.

Zooming in a bit to a weekly chart, we can see that a Friday close below 1.60, in most cases, led to a continuation lower.

It is also particularly bearish that the recent rally put in a lower high at 1.6250 than the previous 1.63 top. Perhaps cable will break out of this massive consolidation pattern after all and lead us back to 1.35. Before then, however, the Fibonacci levels on the weekly chart provide a 1st area of support and decision-making for bulls and bears.

October 4, 2013October 4, 2013

What PMI Week Tells Us

You cant make someone change from being either a lefty in denial or a miserable pessimist (ukipers) that dont want a recovery. I for one will enjoy the upturn and reap the benefits with my company as I can already see. Must go work to do

The above quote is a comment on an article in the Telegraph yesterday that the UK economy is recovering at the fastest rate in the world. During the summer, the UK economy showed some great numbers from all sides of its economy. Construction and manufacturing were buzzing, consumers were spending and house prices were rising. From June through August, services PMI numbers surprised to the upside. Even construction and manufacturing had some very robust months which becoming a great sign of recovery as these sectors in particular suffered tremendously during the Great Recession.

UK PMIs

	October	September
Manufacturing PMI	56.7	57.5
Construction PMI	58.9	60.1
Services PMI	60.3	60.4

While this week’s PMI numbers may have missed expectations, these are some strong PMI numbers. All numbers are nicely above 50 indicating a very robust recovery in the UK. In fact, the September numbers were revised upward since 1st reported a month ago. It looks as though the fundamentals have come to reflect what price action has been telling us for the past few months.

So why the selloff this week? $EURGBP has rallied close to 150 pips off the lows. $GBPUSD and $GBPAUD have both tumbled handsomely from their highs. It looks like a classic case of buy the rumor, sell the fact. The market is forward thinking and now that fundamentals support price action, bulls are taking profits.

Sterling is still very much bullish even at current levels in $GBPAUD, $GBPUSD and $EURGBP. However, these corrections have broken key support/resistance levels opening the door for a deeper correction into next week to match these tremendous GBP rallies.

Mentioned above:

UK economy growing at fastest rate in the developed world (Telegraph)

Global PMI Data (Avondale Asset Management)

Australian Dollar Puts In a Bottom (FMFX)

Reality Bites (FMFX)

Respect the Zone (FMFX)

October 3, 2013

GBP/USD In Yet Another Correction

$GBPUSD bulls just won’t give up. Every single time we have honored a previous high as support, we have seen cable take off to new mid-term highs.

Here is Exhibit A, the daily chart from September 19th:

Here is Exhibit B, the 4hr chart a week later on September 26th:

Now here is today’s 4hr chart:

Bulls and bears are fighting it out, yet again, at a former high. Every battle won by the bulls have led to breakout rallies. A battle won by bears could see price fall to the level of support at 1.6130 which is also another former high (See Exhibit B). Below there is 1.6106, the 50% Fibonacci retracement level of this latest bullish wave. I don’t believe bulls will be truly done until 1.63 is challenged. These former highs are excellent areas for bulls to reload and gun for the ultimate prize above 1.6300.

Trade what you see.

October 1, 2013October 1, 2013

GBP/AUD Still Looking for Highs

During the Tuesday Asian session and into the European session, the $GBPAUD fell to new lows at 1.72. This weakness is attributed to, first, the RBA staying pat on monetary policy when just last week the market was dealing with rumors of an interest rate cut from the RBA. A no-change announcement sparked a relief rally in the AUD, sending the $GBPAUD lower.

Into the European session, the downside only accelerated as UK manufacturing missed market expectations. This helped price reach the 61.8% Fibonacci level at 1.72. However, this price was met by bids and buyers took the weakness as the opportunity to pile into the long term bullish trend that is still very much intact despite the price weakness.

Now with price up over 80 pips already from those 1.72 lows, it looks too late to get into this long trade. Never chase a trade but learn, instead, from the missed opportunity. The moral of the story: when price starts to fall off its highs, draw the Fibonacci levels and wait for price to react accordingly. The trader can then act accordingly.

September 26, 2013

Sterling Digest, 26 September 2013: grumpy bulls

split screen of GBPUSD weekly and 4hr charts — No wonder bulls are grumpy

We left off the Digest musing over the strength in sterling due to robust UK economic data as GBP hit long-term resistance levels against all major currencies. Since August, GBP has experienced tremendous breakouts in some pairs and significant price corrections in others. Now that $GBPUSD is above 1.60, $GBPCAD above 1.65, $GBPAUD above 1.71 and $EURGBP at 0.84, it seems as though GBP bulls are having their way. However, these moves have not been without resistance. The moves higher in sterling have been a grind with slow, choppy moves that have been difficult to trade on anything but a short term basis. With a light calendar this week, the market has allowed GBP to correct but robust economic data gave life to sterling as $GBPUSD, in paritcular, managed not to loose its important 1.60 level. With 3Q at its end, October brings the market its first glimpse of fall season data. If the UK economy continues to put in robust results, expect GBP to continue its summer rally back to long-term resistance levels.

GBP/USD Maintains Bullish Bias (FMFX)
Charts I am watching for this coming week (Peter Brandt) [scroll through PDF to $GPBCAD analysis]
Sterling Proves Pessimists Wrong (Money Beat WSJ)
UK CBI distributive trades survey september: 34 vs +24 exp (Forex Live)
Financial Policy Committee statement from its policy meeting, 18 September 2013 (Bank of England)
Bank of England hits back at critics of forward guidance (FT)
Pimco: Get Set for a Hefty Sterling Decline (Money Beat WSJ)

Read the last issue: Sterling Digest, 23 August 2013: reality bites

September 25, 2013

GBP/USD Maintains Bullish Bias

Since coming off the 1.6160 highs, I have believed that a deeper correction was underway. It wouldn’t come fast but it seemed to me that $GBPUSD could correct much of the breakout rally back to the 50% Fib level at 1.58.

However, what has developed this week is a very different story. $GBPUSD has been very reluctant to move too far from the big psychological level at 1.60. Rallies this week met resistance at the Fib levels and dropped to new lows. A correction lower was in progress albeit on a very slow grind. However, today’s UK CBI retail sales release came in much strong than expected causing price to fail with a higher low after the corrective bounce.

The UK recovery story continues to have legs. And as long as that is the case, $GBPUSD remains on course to revisit the highs at 1.63.

Mentioned above:

Nothing Moves In A Straight Line (FMFX)

Today’s Appearance on FXStreet’s Live Analysis Room (FMFX)

UK CBI distributive trades survey september: 34 vs +24 exp (Forex Live)

September 24, 2013June 8, 2016

Today’s Appearance in FXStreet’s Live Analysis Room

The FXStreet’s Live Analysis Room has become a fun place to stop by and chat markets with veteran trader Dale Pinkert. He has a brought on a wide-array of traders and market participants from all sides, aspects and backgrounds. It’s always an honor to be asked back. (Click the image to listen)

onairnow_fxroom — Listen to Tuesday’s interview ($GBPUSD AT 1.60)

Mentioned during appearance:

Reversal in The Making (FMFX)
Nothing Moves in a Straight Line (FMFX)
Reality bites (FMFX)