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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.

EURGBP weekly chart

Last week started at 0.8003:

EURGBP daily chart
Hindsight is 20/20

EURGBP daily chart as of today premarket

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.

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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

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GBPCAD Above 1.60

GBPCAD daily chart

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

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GBPUSD Update: Maintain Perspective

GBPUSD 60 minute chart

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.

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Sterling Digest, October 29, 2012: Stocktoberfest

In short, I needed to be at Stocktoberfest. Just the exposure to the ideas and wisdom of brilliant, seasoned people always jumpstarts motivation and passion. But the actual in-person connecting with the folks who came to Stocktoberfest was truly inspiring and encouraging for me, a young lady in her career in this industry. Today’s Digest is dedicated to archiving all the reflections and insights that is Stocktoberfest 2012. I was honored to be there. See you all next year!

 

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GBPUSD Reckons

GBPUSD daily chart

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

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Are Euro Bulls Back?

EURGBP daily chart

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.

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