EURGBP Archives - Page 6 of 18

April 25, 2015June 15, 2015

CHART OF THE WEEK: GREECE WOES

Each week, I highlight a chart out of the Quid Report.

We have unfinished business in the $EURGBP after the break of support this week. Greece will remain a basket case because the current Greek government is so new, so young and so boldly naive. The old establishment that makes up the Eurogroup will always have tension with Greece as the kids on the block govern in their own way. The latest proposal could really pressurize the euro.

This is an excerpt from this week’s issue of Quid Report. Subscribers receive my research on all major GBP pairs at the top of the week, including access to @faithmightfx on Twitter for daily, real-time calls and adjustments to the weekly report. AVAILABLE NOW.

April 15, 2015June 15, 2015

QUID REPORT – NOW AVAILABLE

Election jitters played out in trading last week as the GBP weakened across the board. Economists and financial media took to extreme headlines about sterling volatility spiking due to the uncertainty surrounding this particular general election cycle. The GBP did slide but election jitters did not take the GBP under siege. Rather, the Bank of England (BoE) hold on monetary policy last week gave the GBP a bit of reprieve from the election selling. Without a statement from the BoE after its policy announcement, the market is left to trade on its own expectations for a series of interest rate increases out of Great Britain to begin in early 2016. However, in the past few weeks, BoE members have taken to jawboning to temper those hawkish expectations.

In addition to hawkish expectations and election jitters, trading this month is already fraught with seasonality themes….

Read the full report: Quid Report, Volume 7 (subscribers only).

April 2, 2015June 15, 2015

CHART OF THE WEEK: EURO HERO

Each week, I’ll highlight a chart out of the Quid Report.

This week it is the $EURGBP 4-HOUR chart. Everything about this pair screamed for more weakness at the top of the week. And it was bearish until about 8 hours ago. And this chart suddenly came into play. The reasons why are posted on the feed. I love these markets.

Subscribers receive my research on all major GBP pairs at the top of the week, including access to @faithmightfx on Twitter for daily, real-time calls and adjustments to the weekly report. SIGN UP AND RECEIVE A FREE TRADING BOOK AVAILABLE NOW.

February 28, 2015March 1, 2015

The Sterling Digest, 28 February 2015: en fuego

This #Merkel vs #Tsipras float strides across streets of Cologne during today’s carnival. #Greece crisis everywhere. pic.twitter.com/G1uYSuLai3

— Maxime Sbaihi (@MxSba) February 16, 2015

Sterling has staged big rallies across the board. Much of this new strength comes on the back of heightened expectations that the Bank of England (BoE) will increase interest rates even sooner than previously expected. As the market fully digests this new timeline in interest rate hikes, sterling has caught bid as traders buy in anticipation of tighter monetary policy.

While a big reason for the rally in sterling, monetary policy is not the only reason. Global deflation, due to the crash in oil prices, has caused other currencies to weaken considerably. As such, sterling has been able to rally to multi-year highs versus currencies like the Canadian dollar, the euro and the Australian dollar. Lastly, the sterling is catching bid as a safe haven currency. The discord between the the new Greek government and the rest of the European Union and continued manipulation by the Swiss National Bank in the francs markets, has traders piling into sterling as the only desirable European currency available. As long as these conditions continue to persist, expect sterling to continue to benefit on the long side in the medium term.

Unemployment Down, Wages Up in U.K. (Bloomberg)
U.K. Inflation Slows More Than Forecast to Record-Low: Economy (Bloomberg)
Great Graphic: US and UK Unemployment (Traders Log)
UK jobs reports, strong earnings fire up sterling (City Index)
Does It Count as ‘Real’ Deflation When Prices Hit an Oil Slick? (Wall Street Journal)
Bank of England increasingly divided on path for interest rates (Telegraph)
ECB braces for QE as others shift rates (Yahoo! Finance)

January 31, 2015January 31, 2015

The Sterling Digest, 31 January 2015: central bank drama

Davos cartoon posted on Twitter — The World Economic Forum. The time of year when central bankers like to surprise.

It’s been an incredible month. Our first trading month of 2015 is in the books and it did not lack for surprises and drama. Crashing oil prices kicked off volatile trading as the new year began. The Swiss National Bank got things going with their surprise abandonment of their currency peg to the euro and interest rate cut into negative territory. The Bank of Canada surprised markets too with its interest rate cut much sooner than markets expected. The European Central Bank also managed to surprise with a larger than expected quantitative easing package. The Federal Reserve surprised markets too but in the other direction. While it did not make any changes to monetary policy, the $FED remains hawkish following Yellen’s hawkish signals in December. Finally, the Bank of England turned seemingly dovish with its hawks relinquishing their call for interest rate hikes. The incredible drama series that was January certainly sets the stage for a new normal to emerge in 2015.

The Swiss currency bombshell – cause and effect (Financial Times)
2015: The global economy’s ‘sink or swim’ moment (CNN Money)
Carney-Yellen Neck-and-Neck on Being First to Raise Rates (Bloomberg)
Fed Waits, RBNZ Shifts (AshrafLaidi.com)
The Forlorn British Pound: The ‘Schedule’ For Rate Hikes Pushes Out To 2016 (Seeking Alpha)
Don’t Lose the Forest for the Trees: Dollar Rally Still in Early Days (Traders Log)

Image credit

January 8, 2015January 8, 2015

My Appearance on FXStreet’s Live Analysis Room

I was thrilled to be back in the #FXRoom with Dale Pinkert yesterday. He brought me in to talk all things GBP covering $GBPUSD, $GBPJPY, $GBPAUD, $GBPCAD. But he also gave me some nuggets of wisdom on the EUR via the $EURUSD giving some confirmation on the $EURGBP. The show unexpectedly became a golden example of how traders come together with different perspectives and expertises to edify one another.

I also give a sneak peek to a new service I am launching very soon. Watch out for it!

January 7, 2015January 8, 2015

My Appearance on Benzinga’s #PreMarket Prep Show

I had the pleasure of joining Joel Elconin and Brianna Valleskey as a guest on Benzinga’s #PreMarket Prep Show yesterday and talk with them about central banks, interest rates, oil and, of course, currencies!

January 7, 2015January 7, 2015

The Battle for Weakness

The $EURGBP broke to marginally new lows in last week’s trading. Only slightly new, by 22 pips, but new lows nonetheless. The EUR collapsed against all currencies because European Central Bank Governor Mario Draghi continued to deliver dovish rhetoric last week. So on the back of his comments, the $EURGBP fell down to the long-term support at 0.7750.

The $EURGBP had been rangebound for months heading into the new year between 0.8050 and 0.7750. Upon pressing into new lows last week, we note that the RSI on the daily chart put in a higher low. In fact, this bullish divergence on the RSI is even more pronounced on the weekly chart.

The RSI is very suggestive of bullish price action. However, the bulls cannot get too excited. Because also on the weekly chart is a candlestick candle of indecision. For when you see that the $EURUSD has fallen to multi-year lows, it stands to reason that the $EURGBP should have broken this long-term support level quite handedly. However, what we see is that GBP weakness overtook this pair as buyers stepped in at the support level. So given what we see on the weekly chart with this false breakdown coupled with the bullish divergence in the RSI, the prudent action may be to set up at the lows for a move higher especially as we see continued weakness in the $GBPUSD.

November 13, 2014November 13, 2014

Euro Looks Higher

So far, the $EURGBP remains stuck in its huge wedge formation. Price has found resistance all trading session at the 0.7860 level. However, swing traders are looking to the 38.2% Fibonacci level at 0.7880 and 0.7920-70 for an indication of supply and demand. That’s the upside potential.

Since publishing the above at the start of October, the $EURGBP did go higher to 0.8050-70 only to fall back again and put in a higher low. In fact, there are several factors at play currently that may suggest that price could actually rally a little higher still:

Euro sentiment is a extremely bearish levels. The premise goes that when sentiment for asset classes are at extreme levels it is usually a signal in the opposite direction. Thanks to J.C. for sharing his EUR sentiment chart at Stocktoberfest.
GBP weakness fundamentally continues to show through in the economic data. Data releases are still a mixed bag but a year ago we had much stronger data released month-over-month than we having been getting now in recent months.
Today’s break of resistance is supported by a break higher in the RSI which has supported a move higher since price put in the higher low last week.
Bonus: For all you trendline followers, today’s price action has moved the $EURGBP comfortably above the trendline resistance coinciding nicely with the 7860 resistance level was capping price all week .

On the bigger timeframes, the $EURGBP still favors bears long-term. However, it is hard to ignore the price developments of the past 24 hours that point to higher price levels. Expect swing sellers to set up at the higher levels. But if price rallies through the 0.8050 resistance levels, expect the EUR to look for higher still.

October 6, 2014

Euro Finds Its Feet

The EUR has taken new ECB policy very hard. In 2014, the currency has lost over 600 pips against the pound sterling and 1,500 pips versus the US dollar. Those are substantial moves. You have to ask yourself if the short euro trade is not already crowded. Couldn’t it stand to reason that the currency rally into the end of the year? If not, for a couple of weeks? For now 1.2500 $EURUSD has managed to stymie the weakness there. $EURGBP is also bouncing off its multi-year support at 0.7750. Now that the ECB has pulled the trigger on negative interest rates and bond buying, the markets are breathing a sigh of relief and covering positions. It’s a new quarter after all. This 1st full week of trading could see the euro stage a corrective, relief rally.

So far, the $EURGBP remains stuck in its huge wedge formation. Price has found resistance all trading session at the 0.7960 level. However, swing traders are looking to the 38.2% Fibonacci level at 0.7880 and 0.7920-70 for an indication of supply and demand. That’s the upside potential.

However, the downside has serious potential. A break below 0.7750 has huge implications with support not likely until 0.7500/7400. For as long as the ECB is accommodative in the face of tightening out of the BoE, the long-term potential is certainly in the bears favor.