Commentary Archives - Page 66 of 69

November 25, 2012

The GBPNZD PreMarket

In the forex markets, premarket is really only early Sunday morning. With charts frozen until the afternoon open, this can be the best time to find insights before charts start ticking again.

Because the $GBPNZD has not spent much time at these levels, it is taking some years for this currency pair to truly trend again.

Zoom in on the weekly chart and we can see that this pair has been trading rangebound between 1.98 and 1.9270. Last week’s price action tested the intermediate highs at 1.9625 and closed the week in the middle of the channel below the key psychological level at 1.95. The new week open should continue momentum towards the bottom of the channel at 1.9270. That is a key level to the downside for $GBPNZD short term as it continues to consolidate the larger bear trend.

November 25, 2012November 25, 2012

The GBPUSD PreMarket

In the forex markets, premarket is really only early Sunday morning. With charts frozen until the afternoon open, this can be the best time to find insights before charts start ticking again.

Cable closed the week with a Black Friday breakout above 1.6000 and managed to close well above that level. The $GBPUSD spent all last week being supported by the 50% Fibonacci level of the rally from the July lows to the September highs.

Now looking to the week ahead, I can see the $GBPUSD toy around 1.60 in the market open as buyers and sellers jockey for position. However, dips below should be met with bids, even as low as the 50% Fibonacci level of Friday’s breakout. If price gets back above or remains above 1.60 in the early week, it is highly likely that price will move towards the 1.6175 highs.

Despite the current bullish momentum, the $GBPUSD is still rangebound in the longer term. So don’t get caught up in this week’s bullish scenario. We still do not have true direction in this pair until it can close above 1.6300 or below 1.5230.

November 25, 2012November 25, 2012

The GBPAUD PreMarket

In the forex markets, premarket is really only early Sunday morning. With charts frozen until the afternoon open, this can be the best time to find insights before charts start ticking again.

The $GBPAUD is in a long term consolidation pattern with price currently hanging out in the middle of the weekly chart channel. So when the lows held at 1.5182 2 weeks ago, it is worthy to note that price still means to head to the bottom of the channel when price failed higher last week again at 1.5425.

Despite bearish momentum, price managed to close above 1.5300 support level and 50% Fibonacci level. So to start the week the possibility for spikes higher remains at the market open. Pops higher, however, should be met by sellers at or ahead of 1.5425 resistance level aiming to take price towards 1.50 in the coming weeks. Only a close above 1.55 changes the short term momentum to bullish.

November 25, 2012November 25, 2012

The EURGBP PreMarket

In the forex markets, premarket is really only early Sunday morning. With charts frozen until the afternoon open, this can be the best time to find insights before charts start ticking again.

I have been trading the $EURGBP very actively these past 2 weeks. The weekly chart continues to be constructive especially as price held support at 0.7950 to head higher back to 0.8110 on Friday.

Last week started at 0.8003:

Now we sit at 0.8090 to close that week. That close puts 0.81 at play to determine direction in price action this week. A dip to 0.8050-30 is still possible when markets open because of the close below 0.81 but should be short-lived. I expect price to see itself back above 0.8100 later in the Monday session. Only a close below 0.80 changes the bullish picture in play on the weekly and daily charts.

November 1, 2012November 1, 2012

EURGBP Update: bears moving in

EURGBP 8 hour chart — $EURGBP price action today proving once again why I don’t like to buy euros.

While the $EURGBP daily chart started the week looking very constructive, price today collapsed ahead of the 50% Fibonacci level of last week’s price decline. The subsequent price drop found support at the 0.8000 level but bounced again back to 0.8035 intraday. Only a close above 0.8030 would make the bullish picture at the start of the week stand. However, as we head into the New York close, price is below the key 0.8030 level. Watch where price closes the day. If below 0.8030, any pop higher will be met by sellers. If above 0.8030, watch price to move back towards the highs at 0.8050-70. In any case, sellers seem to be lining up making $EURGBP look short term bearish on its failure to get to and break back above 0.8100.

Disclosure: No position

October 30, 2012October 30, 2012

GBPCAD Above 1.60

I haven’t traded the $GBPCAD much this year. Despite some tremendous swings in price action, the 200-day simple moving average tells us that this pair has essentially been flat all year. And I typically stay away from trendless environments. But with price now above 1.60, the $GBPCAD has very specific behavior at this price level that I think provides opportunity.

While 1.60 is the major psychological level, it is 1.6050 that has been the level to determine future direction for this pair. We can see that when price closes the day above 1.6050, we typically see a 200-pip move higher in the $GBPCAD. Even in a trendless environment, those are price moves that swing traders can certainly take advantage of.

Disclosure: Long at 1.6029

October 30, 2012October 30, 2012

GBPUSD Update: Maintain Perspective

I woke up this morning to commentary on the streams saying that risk is ripping higher this morning. Naturally, I checked on the $GBPUSD currency pair to find it rallying off yesterday’s lows near 1.60. It is always good to keep some perspective so I checked the Fibonacci levels and have concluded the following:

This is not a rally. This is merely a corrective bounce in the $GBPUSD. Until price gets back above 1.61 (and closes above the level), the bigger picture still remains intact. Always keep perspective.

Disclosure: Still short.

October 29, 2012October 29, 2012

GBPUSD Reckons

With the 61.8% Fibonacci level being respected, $GBPUSD looks ready to head back to the bottom of its down channel as London opens the new week. Watch $GBPUSD test and break 1.60 on its way to new lows at 1.5850, the 50% Fibonacci level of the summer breakout of 2012.

Furthermore, the USD moves could actually dominate flows as US events risk increases in this last week before the election and NFP Friday. Nevermind Sandy and a docket full of economic releases heading into the jobs report. In contrast, the UK has a very light calendar with only 2 PMI numbers released this week. It seems a very good week for the USD to strengthen significantly against sterling. Could this be the week of reckoning for cable?

Disclosure: Short at 1.6068

October 28, 2012October 30, 2012

Are Euro Bulls Back?

As the market closed Friday trading, $EURGBP encouraged bulls with a close above the 0.80 major psychological level. The close above 0.8030, however, should give bulls even more confidence into this week’s open. As a major support/resistance level, we see the influence a candle close above 0.8030 can have, even more so than the whole number.

I’m still not a fan of a long euro position. But the recent high at 0.8160 is a new high. We have higher lows on the daily chart here. And my friend JC has been bullish the euro ($EURUSD) for some time now. It now looks to me that euro long is the path of least resistance.

Disclosure: Closed shorts at 0.8032 for +56.8 pips.

September 18, 2012

Cable Runs Higher

Now with FOMC behind it, this week’s market open in $GBPUSD was deja vu. Remember when cable closed above 1.60 for the first time in 5 months? The new market opened chopping around 1.60 before breaking higher to 1.6250. We have the same price action as price now chops around 1.6250.

But not everyone believes in this trend. There are a lot of bears out there.

Retail traders have remained net short on $GBPUSD for nearly six weeks.

— John Kicklighter (@JohnKicklighter) September 18, 2012

That’s an incredible statistic in the face of a 500-plus-pip rally. It makes me shake my head to the fact that this pair could run higher just on sheer unwinding of losing positions. Many of these bears point to the sterling’s own weak fundamentals. But the fact is the BoE’s on-hold (for now) monetary stance is much more hawkish than unlimited QE. The very notion of unlimited money printing is ridiculous. QE-infinity is rightfully killing the USD. Even QE3-backed pounds are more attractive at this point. As such, I think that the $GBPUSD can still run higher. Technically, it has given nothing but bullish signals since breaking and holding above 1.58.

Commented on StockTwits: $GBPUSD Only one lower low in past 13 trading days. stks.co/mAeH

— Peter Brandt (@PeterLBrandt) September 17, 2012

As cable opens the week chopping around 1.6250, it works off its overbought nature without retracement. While I do agree that $GBPUSD is overdue for a pullback, we cannot overlook the power a trend. Don’t mistake this chop as a bearish signal. Trends are powerful. I believe this one has just gotten started.

With 1.63 resistance looming not too far ahead (price at 1.6240 as of this writing), time your entries well. Even a pullback to 1.60 doesn’t change the bullish outlook short term. Trade what you see.