Category: The Sterling Digest

With 4 central banks making statements in the past 24 hours, I’d say it’s been a tame session. It’s amazing (to the point of amusement) how much the market pauses and takes a step back for US NFP. Big guns are positioning. If you were around since Asia, you saw $GBPUSD quietly rally to open London at 1.5750. She now sits at 1.5820. You do the math. So the BoE did what was expected. And the market reacted as expected. Weird. And tomorrow is Friday. Trader be aware.

• Bernanke Seen Accepting Faster Inflation as Fed Seeks to Boost Employment (Bloomberg)
• Bank of England, ECB Drop Easing Bias…for now (eToro)
• The Dollar Tanks on WSJ’s Fed Story (Crossing Wall Street)
• Mark Carney hints at higher rates (The Globe and Mail)
• OCR unchanged at 2.5 percent (Reserve Bank of New Zealand)
• Brazil surprises with 75bp cut (FT beyondbrics) [Interesting given yesterday’s headline.]
• EUR/GBP daily chart; elliott wave structure (Chart.ly)
• GBP/CHF Respects Channel Resistance; Swing Projection Eyes 1.4080 (fxtimes)

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What a difference a day makes. Profits were quickly taken this morning as sterling falls back across the board. The stark contrast to yesterday’s bullishness is what markets are made of. FIVE central bank decisions in a week will do that. RBA killed the AUD to kick off this Tuesday trading session. A neutral RBA acknowledged a slower economy yet still left a small signal for further monetary easing. Investors sought out USD and JPY sending $GBPUSD and $GBPJPY to new lows. Risk aversion dragged sterling down against everything else with $GBPCAD, $GBPNZD, $GBPAUD, $GBPCHF all down on the day.

• Is There Something to Month End Flows (FaithMightFX)
• EURGBP Update (50’s Blog)
• GBP/USD Completes a Head and Shoulder Pattern as it Slides Below 1.58 (fxtimes)
• EURUSD, GBPUSD, EURJPY Key Levels and Biases (Tics & Pips)
• GBPUSD daily market cycle (Chart.ly) [Another look at seasonality.]
• UK Osborne: Sees Credit Easing Scheme Up, Running Pre-Budget (Forex Live)
• ECB Surpasses €3 Trillion, Still Most Undercapitalized Hedge Fund In The World (ZeroHedge) [Big fancy headline for: BLAME THE FED]
• RBA leaves rates on hold (The Sydney Morning Hearld) [Interesting video too.]

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This week is packed with event risk as market participants get ready for interest rate decisions from 5 major central banks this week, including the Bank of England, as well as the US NFP. Traders should be ready for what will no doubt be a very volatile trading week.

• Nine weeks of EURGBP (Twitpic)
• GBPUSD under 200 sma on daily chart (Chart.ly)
• Q2 Forex Forecast (Daily Forex)
• GBPUSD Breaking towards the lows of the range (A Keane Point of View)
• GBPJPY A break above 130.30 will… (Chart.ly)
• Disquiet within ECB laid bare after cash injection (Reuters)
• Lord Sassoon tipped as next Bank of England Governor (The Telegraph)
• Bernanke Quells Talk of Fresh Fed Stimulus to Ease Jobless Rate (Bloomberg)

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Here is the first run of Sterling Digest.

I started the Sterling Digest when I was editor of StockTwitsFX.com. I’m so happy to continue the Digest here on FaithMightFX, my new forex blogging home.